Inadequate Accounting Records Can Mean Prison

Former Director Serving 7-Year Disqualification Sentenced

Overview Of Inadequate Accounting Records Can Mean Prison

Inadequate accounting records can mean prison; so for John Hanbury, disqualified as a Director in 2018 and convicted of drug offences in 2015, he was sentenced today at Bradford Crown Court.

John Thomas Hanbury, 63, was today sentenced to 8 months imprisonment, suspended for 12 months, and 150 hours of community work after having pleaded guilty to failing to keep adequate company records during his time as a Director of Crownsbury Ltd.

John Hanbury had been appointed director of Crownsbury in 2016, and the Company began operating a payroll processing bureau. The business went into Administration in July that year but Hanbury failed to provide adequate accounting records to the Joint Administrators.

Further investigations by the Insolvency Service found various large payments could not be properly verified or explained, and in August 2018 John Hanbury was disqualified as a Director for 7 years.

Prior to this, John Hanbury had been found guilty of assisting in the supply of controlled drugs, receiving a suspended sentence which was still in force for this prosecution.

John Hansbury’s existing disqualification undertaking, which runs to 2025, means he cannot, directly or indirectly, be involved in the promotion, formation, or management of a company without the permission of the Court.

Insolvency Service Comment

Julie Barnes, Chief Investigator at the Insolvency Service, said:

Company directors must fulfil their legal obligations and John Hanbury totally reneged on his responsibilities.

John Hanbury’s sentence clearly demonstrates that if rogue directors fail in their duties, they will be investigated by the Insolvency Service and could lose the privilege of limited liability trading or ultimately risk facing a criminal prosecution.

Oliver Elliot Observation: Inadequate Accounting Records Can Mean Prison

Our CEO, Elliot Green observes that keeping company records is not a trivial requirement set out in Section 386 of the Companies Act 2006: “The legislation is very clear and by virtue of Section 387 of the Companies Act 2006 it is an offence to fail to keep adequate accounting records. Company officers of Limited Companies need to be aware that they must fully comply with their Director Duties.”.

Section 387 Of The Companies Act 2006

(1) If a company fails to comply with any provision of section 386 (duty to keep accounting records), an offence is committed by every officer of the company who is in default.
(2) It is a defence for a person charged with such an offence to show that he acted honestly and that in the circumstances in which the company’s business was carried on the default was excusable.
(3) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b) on summary conviction—
(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);
(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

Disclaimer: Inadequate Accounting Records Can Mean Prison

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