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Companies' Debts And Liabilities (Directors' Responsibility)

Volume 720: debated on Thursday 18 November 1965

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17.

asked the President of the Board of Trade if he will introduce legislation to make directors of companies personally responsible for their companies' debts and liabilities in cases where incompetence or culpability can be proved.

Under Section 332 of the Companies Act, in certain circumstances the court may make a director of a company who was knowingly party to its fraudulent trading, personally responsible for its debts. The proposals which I shall be making this Session for new companies legislation will not extend to amendment of Section 332.

I thank my right hon. Friend for his Answer, but will he look at this question again? Would not he agree that the Jenkins Committee found some time ago that there was abundant evidence already in existence that a change in the law on this matter was needed? Would not he accept that investors should have a right of redress against those who are responsible for the mismanagement of their investments?

I agree with my hon. Friend that this is an imporant point. But there is a limit to the amount of legislation which we can carry through in the present Session.

If the Minister gives further thought to this matter, as the hon. Member for Derbyshire, South-East (Mr. Park) suggests, will he carry it to its logical conclusion? If unofficial strikes cause the debts, will he make the strikers responsible?