Beyond the books: limits to UK directors' record-keeping duties

An English court recently reinforced directors' obligations regarding company records but clarified that there is a limit to the extent of those obligations for directors who have resigned.

Background

New Line Polymers Limited (in liquidation), a waste recycling company, entered liquidation in 2017 and claims were brought against its directors — Mr Brown and his children — for alleged breaches of duties relating to transactions that may have personally benefited them.

As a result of financial difficulties, a liquidator was appointed who encountered significant obstacles accessing company records:

• Incomplete accounting software data with an "unusually large number" of reversals.
• "Huge gaps" in documentation, such as missing board minutes, leading to a feeling that physical records had been "sanitised" before handover.

Decision

While many of the substantive claims were dismissed, the judgment established clear boundaries for directors' record-keeping duties.

While in office, directors must:

• Ensure proper records of transactions are maintained.
• Provide accounts of their personal dealings with company property.
• Deliver company records to liquidators when required.

On resignation, directors have a duty to ensure the company can access existing records but after (pre-insolvency) resignation, a director is not required to do any of the above.

Key takeaway

Whilst directors have comprehensive record-keeping responsibilities while in office, after resignation directors are not required to maintain or deliver up company records, unless they retain any, which is a clarification to the existing approach (but they still have duties to cooperate with the liquidator and provide information about the company's business and dealings).

Find out more 

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring and Insolvency team.

Manolete Partners plc v Brown (Re New Line Polymers Ltd (in liquidation)) [2025] EWHC 522 (Ch)