Companies Act 1947

101 Miscellaneous amendments as to civil and criminal liability.

(1) In any case in which a company's business is carried on in such a manner as to make the directors liable under section two hundred and seventy-five of the principal Act (which relates to the responsibility of directors for fraudulent trading) any other person who is knowingly a party to the carrying on of the business in that manner shall be similarly liable, both civilly under subsection (1) and criminally under subsection (3) of that section, and accordingly that section shall have effect with the substitution—

(a) in subsection (1) thereof for the words " any of the directors, whether past or present, of the company " of the words " any persons ";

(b) in subsection (2) thereof for the word " director " where it first occurs of the word " person ", for the words " the director, company or person " of the words " the person liable or any company or person acting on his behalf " and for the word ' director " where it last occurs of the words " person liable "; and

(c) in subsection (3) thereof for the words " director of the company " of the word " person ".

(2) A person convicted under subsection (3) of the said section two hundred and seventy-five shall be liable to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds or to both (instead of being liable only to imprisonment for a term not exceeding one year).

(3) Subsection (1) of section two hundred and seventy-four of the principal Act (which penalises the persons responsible where proper books of account were not kept by a company throughout the two years immediately preceding the commencement of its winding up) shall have effect and be deemed always to have had effect as if after the words " the period of two years immediately preceding the commencement of the winding up " there were inserted the words " or the period between the incorporation of the company and the commencement of the winding up, whichever is the shorter " and as if, in the phrase " unless he shows that he acted honestly or that in the circumstances in which the business of the company was carried on the default was excusable " for the word " or " there were substituted the word " and ".

(4) So much of section two hundred and seventy-seven of the principal Act (which deals with the prosecution of officers and members of a company for offences discovered on a winding up) as—

(a) relates to prosecutions by the liquidator (except as respects prosecutions instituted or ordered by the court to be instituted before the coming into force of this section); or

(b) requires the Director of Public Prosecutions or the Lord Advocate, before instituting a prosecution, to form the opinion that the proceedings ought to be conducted by him; or

(c) requires the Director, if he forms the opinion that the case is not one in which proceedings ought to be taken by him, to inform the liquidator;

shall cease to have effect.

(5) Any person who gives or agrees or offers to give to any member or creditor of a company any valuable consideration with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company's liquidator shall be liable to a fine not exceeding one hundred pounds.