Why is DIY The Wrong Way To Liquidate Your Company? - The legalities aside, It's a huge risk to take...
The Information Commissioner’s Office (ICO) is a watchdog with teeth. Tasked with policing and enforcing data protection law, they have considerable power and have shown they have the will to use it. Companies failing to comply with data protection legislation can currently face penalties of up to £500,000.00 which will increase exponentially later this year when GDPR comes into force.
Nuisance Communication – A modern scourge
The ICO, amongst other things, is targeting the marketing firms responsible for millions of unwanted, illegal phone calls and text messages. The ICO has made good use of its ability to impose substantial fines and cessation orders on those organisations it has caught flouting the rules. Increasingly, the Directors of those rogue firms have been attempting to avoid data protection fines by simply liquidating these companies and/or declaring bankruptcy, leaving the fines unpaid and starting again elsewhere doing the same thing as a ‘new’ company.
Directors can now be held personally liable for data protection breaches
We’ve recently pointed out that the Insolvency Service is banning more people from being company directors than at any other time in its history. The ICO has been working with the Insolvency Service and Claims Management Regulator to ensure that the Directors of such nuisance firms who attempt to duck their responsibilities by folding their company receive such disqualifications.
From Spring 2017 amendments to the Privacy and Electronic Communications Regulations legislation made it possible for such directors to be held personally liable and forced to pay fines of up to half a million pounds in addition to the fine imposed on their companies. This should provide a powerful deterrent to those willing to liquidate and restart.
It seems to be working
Firms behaving improperly shouldn’t be allowed to use underhand means to gain an edge on those who comply with their obligations, so early signs are encouraging. With rogue companies being a burden on the public purse and nuisance communication being a burden on all of our sanity, it’s most welcome to see agencies willing to exercise their powers, willing to take action and willing to communicate with one another towards a common goal.