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As CIB is part of the Insolvency
Service, does it only investigate companies which have “gone bust”?
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What powers of investigation does CIB
have?
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3.
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What traders can CIB investigate?
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Limited companies and Limited
Liability Partnerships (LLPs) that have a business address in England,
Wales or Scotland, provided they have not been dissolved. This
includes foreign companies.
We cannot investigate sole traders or
ordinary partnerships.
If you are unsure, we suggest that you
speak to us first (see “Contact Us”). Alternatively, you can still
submit your complaint and we can then consider whether the trader
falls within the scope of our powers. |
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4.
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What if I have a
complaint against a sole trader or a partnership?
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By law CIB cannot investigate sole
traders or partnerships (except Limited Liability Partnerships, which
are registered at Companies House).
If you have a complaint about a
business which is not run by a limited company your local Trading
Standards Department or Citizens’ Advice Bureau may be able to help.
If you are a consumer, you may wish to
seek help or advice from “Consumer Direct”
www.consumerdirect.gov.uk or telephone 08454 04 05 06. |
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5.
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What if the
company is in liquidation?
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CIB will consider complaints against
companies which have entered into formal insolvency proceedings
(administration, administrative receivership, and voluntary
liquidation).
However, CIB is unlikely to
investigate where the misconduct alleged can be dealt with by the
Insolvency Practitioner involved, who has a duty to report to the
Secretary of State under the Company Directors Disqualification Act
1986, and can also report criminal matters to the Secretary of State.
CIB will not consider a complaint
against a company in compulsory liquidation (i.e. where a winding up
order has been made by the court) because the Official Receiver has a
statutory duty to investigate such companies, and will report all
matters of concern to the Secretary of State for BIS.
A list of Official Receivers can be
found on the Insolvency Service Website at
http://www.insolvency-service.co.uk/officemap.htm. |
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6.
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Can I insist on
an investigation?
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No. |
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7.
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What sort of
complaints may CIB investigate?
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Any complaint that provides good
reason for an investigation and where there is both a public interest
in investigating and the prospect of follow up action resulting.
Generally there must be reasonable grounds to suspect fraud, serious
misconduct or material irregularity in a company’s affairs.
(CIB does not carry out criminal
investigations, but its findings may be used to launch criminal
proceedings).
CIB will not usually investigate
where:
·
The matter
is already being investigated (including a criminal investigation) and
a further investigation would produce no additional benefit for the
wider public and/or would hamper the existing investigation.
·
The only
issue is non payment of a debt, or resolution of a commercial dispute
(unless there appears to be a pattern of misconduct).
·
The issue is
internal to the company, its management, or shareholders and there is
no wider public interest in investigating. CIB has no powers to
intervene in a company’s internal affairs, management or control.
·
The
complaint is better dealt with by another public body (e.g. the
Financial Services Authority for complaints against businesses in the
financial services industry).
·
The
complaint is about the quality of goods or services, or delay in
supplying them. You should consider contacting “Consumer Direct” in
the first instance
www.consumerdirect.gov.uk or telephone 08454 04 05 06 .
HOWEVER,
where payment has been made in advance, and the company appears to
have no intention of supplying the goods or services, it may be
appropriate for CIB. |
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8.
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What can CIB do
if it does investigate?
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It can:
·
Present a
petition to the court to wind up a company in the public interest
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Apply to the
court to disqualify a director, or assist colleagues in the Insolvency
Service to bring disqualification proceedings
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Disclose
information to other public bodies who can carry out a criminal
investigation (e.g. BIS Prosecution Lawyers, police or the Serious
Fraud Office) with a view to prosecution.
·
Refer
information to other regulators or bodies to consider disciplinary or
other action against their members (e.g. the Institute of Chartered
Accountants, or the Law Society)
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Exceptionally, to take informal action to stop undesirable trading
practices or seek some other remedy to deal with its concerns. |
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9.
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If CIB
investigates will they tell me what they find out ?
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No. Investigations are confidential
and we are not allowed to tell you what we have found out. This
includes feedback on our original decision whether to investigate a
particular company, or not. |
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10. |
Will I ever know
what has happened as a result of an investigation?
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You might if CIB takes action that
becomes public knowledge (e.g. a winding up, prosecution or
disqualification) but only when the matter is dealt with in open
court. Successful outcomes are usually reported in the press. |
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11. |
Will I have to
pay for an investigation?
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No. |
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12. |
If a company is
trading whilst it is insolvent will CIB investigate?
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Trading by a company whilst it is
insolvent is not in itself grounds to justify an investigation. There
must be wider concerns about a company or its trading practices. |
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13. |
Will CIB
investigate where it appears that a disqualified person is acting in
the management of a company?
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The Insolvency Service operates a
“Hotline” which enables people who have information about disqualified
directors and undischarged bankrupts, who blatantly disregard their
disqualification, to pass it on.
However, if there are other concerns
about a company’s activities, especially where the company is still
trading, it would be more appropriate to complain to CIB directly.
(As CIB and the “Hotline” team are
both part of the Insolvency Service, they can liaise to ensure that
the complaint is handled by the appropriate section).
If it appears that a person has indeed
been acting whilst disqualified, and there are no other concerns, the
complaint will be referred directly to BIS Prosecution Lawyers to
consider a criminal investigation.
If there are other matters to
investigate, CIB can refer the matter to BIS Prosecution Lawyers as
part of its follow up action resulting from an investigation.
Click here for details of the “Hotline” |
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14. |
Will CIB
investigate so‑called ‘Phoenix Companies’?
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Setting up a ’Phoenix Company’ - to
carry on the same or similar business of an earlier company which has
“gone bust” - is not wrong in itself, although if a company has gone
into liquidation there are restrictions on the re-use of its name.
However, CIB will consider
investigating allegations of this nature where there are wider
concerns about either the trading practices of the companies or the
circumstances surrounding the failure of successive companies. We
treat each case on its individual merits. |
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15. |
Can CIB help me
to recover money I am owed by a company?
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No. CIB has no power to recover debts
on your behalf. Furthermore, when we do investigate, we are prevented
by law from providing information to creditors about a company’s
activities.
Any action we take will be in the
wider public interest, and must take into account the interests of all
those involved, not just individual creditors. |
