If your business ever runs into financial difficulties, how you handle the situation can have serious and lasting consequences. That’s the message behind a recent case involving a Staffordshire director who’s just been banned from running a company until 2031.
Kulbarg Singh, director of Aldridge Construction Engineering Ltd, has been disqualified for six years after selling off over £1.5 million worth of company assets to another company he also controlled - for under £500,000.
In one part of the sale, Singh transferred seven historic vehicles - including two Jaguars and three Rolls Royces - for just £1. The cars alone were worth more than £100,000. In total, the company was left more than £1 million worse off from the under-priced sales.
The company went into liquidation the following year, owing over £1.5 million to HM Revenue and Customs and other creditors. The Insolvency Service described Singh’s actions as deliberately putting the company’s assets out of reach of those creditors - and they’re now looking at ways to recover what they can.
What to do if your company is struggling?
The case serves as a strong reminder that there’s a need to take care if your company is in difficulty.
If your business starts to show signs of insolvency (such as struggling to pay debts, or liabilities outweighing assets), it’s crucial to get advice early. The sooner you act, the more options you’re likely to have.
While the temptation may be to protect shareholders, it’s important to remember that if the company becomes insolvent, your responsibilities as director will apply towards those the company owes money to, instead of the company.
If you’re concerned about your company’s financial position or unsure about how to handle a specific situation, don’t leave it too late. A quick chat with us can save a world of stress later on - and help keep your business (and your reputation) intact.
The government has launched its Small Business Plan which it believes will help small businesses to grow and encourage entrepreneurs to start businesses.
From 18 November 2025, identity verification will become a legal requirement for all company directors and people with significant control (PSCs). This is part of a wider reform under the Economic Crime and Corporate Transparency Act 2023, and it’s set to impact millions of individuals connected to UK companies.