Is bankruptcy a stigma, a reflection on someone’s character as well as a mark of professional failure, or is it a sign of a risk taker, someone with an entrepreneurial spirit? Ford, Disney and Heinz all filed for bankruptcy before becoming multimillionaires and legendary household names. According to Sir Alan Sugar (who has twice been bankrupt), “in the US the stigma of being bankrupt or going to Chapter 11 is not looked down upon or frowned on as it is in Europe.”
From 8 June 2014, Companies House will be checking to prevent the registration of any company with an undischarged bankrupt as a director. Checks are already made in relation to appointments against the register of disqualified directors. The checks will be done against the Individual Insolvency Register, a register of bankruptcies that are current or have ended in the last three months. The Individual Insolvency Register is accessible to anyone by visiting the Insolvency Service’s website at http://www.bis.gov.uk/insolvency and clicking on the Individual Insolvency Register. So whether you are a famous celebrity or Joe Public the details are on the register for all to see.
Any application to register a new company will be rejected by Companies House from 8 June 2014 if it has an undischarged bankrupt as a proposed director.
So is bankruptcy a stigma, a reflection on someone’s character? Unfortunately in the experience of some, it can be. In a recent case, an individual took action against a former director. It transpired that the defendant had previously voluntarily declared himself bankrupt and he was not in the slightest bit concerned about a judgment being entered against him and being declared bankrupt again. The claimant said that, had they checked this individual’s bankruptcy details before appointing him, they would never have put him in the position of trust and confidence that they did. Bankruptcy details can be found by a search of the Land Charges Register, or via the free checks available on the Insolvency Service website.
So is bankruptcy professional failure? Peter Stringfellow, Eddie the Eagle, Christopher Biggins and George Best are all household names who have been bankrupt. The jury’s out on that one.
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