Bankruptcy - you can't "manage or promote a company", but what does that actually mean?

MarkWatson

Does anyone know? I've read the bankruptcy restrictions guide on the gov.uk site here:

https://www.gov.uk/bankruptcy/restrictions

It says you cannot "create, manage or promote a company without the court’s permission", but what in practice does that involve. I understand that you can be employed while you are bankrupt, so if part of that job involves promoting the product that is made by that company would that not be allowed? Or the company's brand? And does it mean you can't have any management role in a company while you are bankrupt?

I can't find any guidance about this anywhere so any guidance would be very helpful. Many thanks.

MalMonroe

Basically you can't be in charge or in control of any part of a company. You can't be a director or manager of a company. You have to keep a low profile until your bankruptcy expires.

If you work in marketing, you'll be able to promote a company's products and brand but not the actual company. 

Yes, it does mean that you cannot have any management role in a company while you are bankrupt.

flipflopflo

Though you can be a sole trader. 

A_Lert

I think the relevant law is the Company Directors Disqualification Act 1986. This law appears to be intended to apply to company directors and anyone else with similar authority over the whole company. The provisions are broad to cover "shadow directors" (who tell the official directors what to do), but I don't believe it would ban someone from lower and middle management roles. However you may want actual legal advice.

The_Real_Cheddar_Bob

I can't imagine that a depot manager for example would be a role you wouldn't be able to do. 
As long as you have a boss, or two, then I wouldn't think it was an issue. 

MarkWatson

Thank you v much indeed, all that advice is very helpful. The situation is this is someone who was in his year of bankruptcy (he owed a lot of people money) and then went back to the same business, offering training courses under the same name, albeit these were now being offered by another company. This company had only one Director, set up by the bankrupt person's partner before the bankruptcy kicked in and this (bankrupt) person then ran all the training courses, sent out emails signing himself as "Founder" of the business and offering courses and events and also promoting the company's courses in the media and on his own social media.

From what you are saying, this seems to be a breach of the regulations saying that he cannot "promote or manage" a company, however he would deny that he had any role in directing the actual company operation or managing the finances in any way. I'm trying to work out whether there is any loophole or exception he might scurry through, or does it sound like he was on the wring side of the line in terms of the rules?

Flyright

This does potentially sound like a breach of s11 of the Company Directors Disqualification Act 1986, however if this person is now discharged from their bankruptcy the Official Receiver may not be minded to persue the matter.

MarkWatson

I did a bit of digging following your tips and I think that "promoting a company" has a much narrower definition than generally marketing it:
A promoter is anyone who takes part in forming a company or, for example, someone who takes part in raising capital for the company before it is formed.
I'm wondering whether he wouldn't have broken the rules simply by promoting the company in the colloquial sense.

Flyright

Describing oneself as a 'founder' does seem to go beyond 'promoting' a business if that person is also offering courses and events, particularly if the person was also presenting or hosting those events.  

MarkWatson

Helpfully, the Insolvency Service has also answered the question:

"The term ‘promoter’ and ‘promoting’ isn’t connected to advertising or marketing.  It is the act of setting up the limited company.  The promotion phase specifically relates to the period of time before the company is officially incorporated and registered on the register of companies (at Companies House).  The person responsible for forming the company (prior to it having been incorporated) is said to be the promoter".

teachfast

Flyright said:

This does potentially sound like a breach of s11 of the Company Directors Disqualification Act 1986, however if this person is now discharged from their bankruptcy the Official Receiver may not be minded to persue the matter.

People who are 'minded' rarely have much of a mind to apply to a situation.