Two directors of LRT Facilities Management Limited, a company providing security guards in the Midlands, have been disqualified from acting as company directors for seven years each, for failing to pay tax or keep proper accounting records.

The disqualification follows an investigation by The Insolvency Services Company Investigations Team in Manchester.

The company provided security guards, mainly to the building industry in the Midlands. The company entered Creditors Voluntary Liquidation on 12 August 2010 with assets of 718 and liabilities of 293,098.

The investigation found that Mr Larry Thomas, 57, of Hockley, Birmingham whilst not formally appointed as a director of the company, was sufficiently involved in the management and decision making to be considered to have acted as a director throughout the companys trading period; a matter neither director disputed.

Mr Thomas, gave an undertaking to the Secretary of State for Business, Innovation and Skills on 19 November 2012, that he will not act as a director of a limited company for seven years. The disqualification comes into force with effect from 10 December 2012.

Mr Thomas disqualification follows the undertaking given to the Secretary of State on 27 June 2012 by his fellow director, Mr Kirby Anthony Williams, 55, of Oldbury, West Midlands. Mr Williams disqualification, also for seven years came into effect on 18 July 2012.

Mr Williams, was the registered director from 10 February 2009 until the date of the liquidation on 12 August 2010.

Mr Williams and Mr Thomas did not dispute that they had failed to ensure that the company maintained, preserved or delivered up adequate accounting records. As a result it has not been possible to:-

Verify the financial position of the company at any point during its trading. In particular, it has not been possible to establish if expenditure, including cash payments of 120,132, was for the benefit of the company.

Verify that Mr Thomas was owed 45,000 at the date of the liquidation, as it was not possible to establish when and how he injected personal funds into the company or when and how any repayments were made to him.

Verify the extent to which the company was indebted to HM Revenue & Customs (HMRC) at liquidation in unpaid VAT.

Mr Williams and Mr Thomas also did not dispute that they failed to ensure that the company complied with its statutory obligations to file VAT and PAYE returns to HMRC. At liquidation the company owed at least 173,324 to HMRC.

Commenting on the disqualifications, Claire Entwistle, Director of Company Investigations North said

Directorship is not simply about whose name is registered at Companies House, it is about who is actually making decisions.

The Insolvency Service will rigorously investigate such matters and will hold to account both named directors and those acting as directors behind the scenes, and anyone colluding to protect them.

Failure to comply with basic requirements of record keeping and tax requirements will result in the protection of limited liability being withdrawn, as these two directors have found out.