Director banned after failure to maintain and preserve adequate accounting records meant £4 million turnover could not be explained
Mitchell James Smith, 40, from Dudley, has been disqualified as a director for 7years.
He was director of MJS Business Ltd, a home renovation and refurbishment business which was started in late 2017 and traded as MJS Interiors, based in the West Midlands.
However, the company struggled and by late 2020 had ceased trading before liquidators were appointed to close the company.
The Liquidators reported to the Insolvency Service that the director failed to co-operate with them and failed to deliver up the company’s accounting records, meaning it was not possible to determine if assets could be realised for the benefit of creditors, or how much any creditors were owed.
This triggered an investigation by the Insolvency Service, which uncovered money paid to the company totalling £2,189,405, for which there was no explanation. In addition, outgoing payments of £2,205,375 were not explained.
The Secretary of State for Business, Energy and Industrial Strategy accepted a disqualification undertaking from Mitchell Smith after he admitted failing to maintain and/or preserve adequate accounting records or, in the alternative, failing to deliver up to the joint liquidators such records as were maintained. His ban commences on 8 March 2022 and runs for 7 years.
The disqualification undertakings prevent both from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
Dave Elliott, Chief Investigator at The Insolvency Service said:
It is important for all directors to be aware of their responsibilities to the company and its creditors. Failure to maintain accounting records is a failing for which the Insolvency Service will seek serious and significant sanction.
Notes to Editors
Mitchell James Smith is of Dudley, West Midlands and his date of birth is October 1981.
MJS Business Ltd (Company Reg no. 11125409).
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:
act as a director of a company
take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
be a receiver of a company’s property
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Persons subject to a disqualification order are bound by a range of other restrictions.