Laws apply to every director in business, even the famous ones

Being the one who holds the purse strings and calls the shots means that you don’t take orders from anybody and can finally plot your own course. 

It also means that now all the oversight, responsibility and even blame rest solely on you too.

Like most jobs and positions, some people are naturally suited to their roles, others will grow into them and develop with experience, nurture and training while others will flounder and hope to move onto something else before something bad happens. 

We suspect there was something of the latter in the air last week when the Insolvency Service reported that it had banned self-proclaimed diva and TV personality, Gemma Collins from being a director of any UK company for three years. 

When she wasn’t dancing on ice or carousing around Essex for the cameras, Ms Collins ran a clothing store, the Gemma Collins boutique, based in Brentwood from 2012 until it was liquidated in 2017. 

Despite publicly claiming that the store had closed because widespread homelessness had killed the fun vibe of the area, the actual cause was financial. 

The Insolvency Service found that the store had repeatedly missed VAT payments and deadlines, running up additional arrears for fines until it owed over £70,000 by the time of its closure. 

The official report said: “Since at least 7 October 2013 until 11 July 2017, the date of liquidation, Ms Collins caused Gemma Collins Boutique Limited to trade to the detriment of HMRC by failing to ensure it submitted returns and made payments as required for VAT.”

The investigation also found that more than £280,000 went out of the company bank account during the period it was behind on its VAT returns including some £33,298 paid to Gemma Collins herself. 

The boutique company was finally dissolved in January 2019.

Ms Collins also resigned as a director of her other companies – Gemma Collins Limited and Gemma Collins Clothing Limited in January ahead of the ban which came into force on February 14th.

Companies can fail for many reasons but when one goes into liquidation it’s an essential duty of the liquidator to investigate the circumstances.


Being a director of a company isn’t just a fancy title to have on a business card or a LinkedIn profile – the position has legal obligations that have to be discharged including promoting the success of the company and always acting with reasonable care, skill and diligence. 

The liquidator is looking for specific examples of wrongdoing or bad practice including what Ms Collins has been banned for – using money that should have been set aside for tax to continue trading. 

Some of the other main behaviours that liquidators particularly frown upon include:

  • Taking on more debt when the company was insolvent with no reasonable chance of recovery
  • Paying some creditors ahead of others – preferential payments
  • Selling company assets for less than their fair market value
  • Not providing goods or services that have been paid for
  • Failure to co-operate with the liquidator – they don’t give up and go home!
  • Fraud

These investigations don’t just include any named company directors at the time of the liquidation but also anybody who’s been a director in the previous three years and anybody who’s acted as a director even if they’ve not formally been identified as one at Companies House. 

Of course any director who does their duty and their best to help their company thrive has nothing to worry about if the company does ultimately go into insolvency. 

One of the key decisions any company director can make is to know when to ask for help.  

Even the best administered companies run into trouble now and again and knowing when to plough on through a temporary blip or call in the professionals can be the difference between sinking and survival. 

You can start the conversation by get in touch with us today.