What can happen

Companies Investigation Branch

What Can Happen

We may decide that there is insufficient good reason or that it is not in the wider public interest to investigate.

However, where we do decide to investigate:

Where the investigation shows that the company’s business is being operated contrary to the public interest (e.g. in a manner likely to cause harm, detriment or loss to third party consumers, investors and traders) then we can ask the Court to make a winding up order. This will put the company into compulsory liquidation and thereby prevent it from further trading. This is the follow up action that we are most likely to take.
(This does not stop the individuals involved with the company from trading through another company, or on their own. The purpose is to stop the immediate mischief or undesirable trading activities as soon as possible).
If the behaviour of the directors is such that they appear “unfit” to be directors, we can apply to the Court for them to be disqualified from acting as company directors, or provide information to colleagues in the Insolvency Service (who investigate companies that have become insolvent) to assist with their disqualification effort.
(This will stop individuals running companies in the future, but will not stop them trading on their own or in partnership. However, they will lose the privilege of “limited liability” and will be personally responsible for the debts they incur).
The information we obtain may be passed to BIS Prosecution Lawyers, police or other investigation agencies, with a view to them carrying out a criminal investigation, where it appears that criminal offences have been committed by the company or its officers.

Where appropriate, a formal warning letter may be sent instead of prosecution.
(This is more likely where breaches are capable of being remedied and there has been no obvious harm. For example, failure to record the required company details on business correspondence. However, the decision not to prosecute will be reconsidered if the same or further offences come to our attention).
The investigation may provide us with information which we can pass on to another regulatory organisation which has powers to deal with what we have found.

Exceptionally, where we have concerns about a company’s trading activities or the administration of its affairs, but there is no basis for formal action or the management appear capable of remedying the position, we may take some other action such as an “informal warning” letter. This will set out our concerns and the improvement expected. We may ask for proof that appropriate action is being taken.
(However, it is not our role to monitor the affairs of any company or to provide feedback to a company following an enquiry. This exceptional step will be taken only if it is the appropriate outcome in the wider public interest. We may have a “second look” to confirm that improvements have been made, particularly if further complaints are received).
The investigation may show that the original concerns were unfounded, and no other concerns have arisen, in which case no further action will be taken.

Other Information

What we do