Companies Act 2014 section 609

Personal liability of officers of company where adequate accounting records not kept

Section 609 deals with the personal liability that can be imposed on company officers where a company being wound up has failed to keep adequate accounting records as required by the Act.

• Where an insolvent company in liquidation has breached its obligations to keep adequate accounting records (sections 281 to 285), the court may declare current or former officers personally liable, without any limit, for all or part of the company's debts
• The court may only make such a declaration where the failure to keep proper records contributed to the company's inability to pay its debts, created substantial uncertainty about the company's assets and liabilities, or substantially impeded the orderly winding up
• An officer can defend against such a declaration by showing they took all reasonable steps to ensure the company complied with its record-keeping obligations, or that they reasonably believed a competent person had been assigned and was carrying out that duty under the supervision of a director
• The court can enforce any personal liability declared by placing a charge on debts owed by the company to that officer, or on any mortgage, charge, or interest in company assets held by or on behalf of that officer