Incorporated rogues

There is much evidence that dubious characters can masquerade as bona fide business people by calling themselves directors and wrapping themselves in the cloak of incorporation. They use limited liability status to avoid any personal, financial liability.

Stories abound of “directors” who run up debts, place their insolvent businesses into receivership, buy any useful assets from the receiver at a knock down price and start again with a new company and new directorship. Creditors are left carrying the financial responsibility for the directors’ actions.

Which is why it is gratifying to see these rogue “directors” getting their just deserts. Consider a recent case where the directors of Club Media Systems Limited were disqualified for a total of nine and a half years for failing to provide agreed services or paying company paid tax.

Garry Wayne O’Loughlin and Nicola Martin Hobson, directors of Club Media Systems Limited, based in Blackpool, which traded as a provider of digital advertising services, were been disqualified for a total of nine and a half years, for entering into agreements to provide advertising services which it was unable to provide and failing to make sure the company paid tax due to HMRC.

The disqualifications follow an investigation by the Insolvency Service.

The investigation found that Mr O’Loughlin and Ms Hobson, as directors of Club Media systems Limited, entered into agreements with customers for advertising services it was unable to provide, resulting in these customers being owed at least £22,715 at the date of liquidation.

Robert Clarke, Group Leader of Insolvent Investigations North at the Insolvency Service, commenting on the disqualifications, said:

“Companies have limited liability, which is a privilege, not a right. These two directors entered into agreements which they knew the company could not fulfil, to the detriment of its customers, and failed to deal with its tax affairs, resulting in this privilege being withdrawn.”

The company was placed into liquidation on 21 March 2012 with an estimated deficiency of £739,179.