The Office of the Director of Corporate Enforcement (ODCE) highlighted in its latest Annual Report that it continues to investigate companies which have been struck off the register due to a failure to file annual returns.

The ODCE initiated or contemplated disqualification proceedings against the directors of 20 such companies in 2011.

According to the report, disqualification proceedings have been considered in situations where, in addition to the failure to file annual returns, the ODCE finds that the company was insolvent at the time it was struck off and it appears that the directors allowed the company to be struck off so as to avoid creditors and to escape personal liability for the debts of the company.

The ODCE has stated that directors may seek to remedy their default by taking the following actions:

• Regularising the position by restoring the struck-off company to the register, which would involve filing all outstanding annual returns and, in some cases, an application to the High Court.
• Satisfying the ODCE that all liabilities had been settled at the time of strike-off or prior to the issue of proceedings. Directors must be in a position to produce accounts dating back to the last set of filed accounts, or since incorporation where accounts have never been filed.

The comments of the ODCE serve as a warning to all directors that their compliance with company law may be investigated even where their company has been inactive for a number of years.

Contributed by Ian Murray.

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