Hampshire company directors are being warned to steer clear of unlicensed insolvency advisors.

Accountancy and advisory firm Azets, with offices in Southampton, Portsmouth, Winchester, Romsey, and Havant, has raised the alarm over the potential risks of engaging with such advisors.

The warning comes in the wake of the Insolvency Service (IS) winding up Save Consultants Ltd for unlawfully offering insolvency practitioner services, jeopardising the integrity of the insolvency system.

The IS also appointed provisional liquidators to connected firms, Atherton Corporate (UK) Ltd and Atherton Corporate Rescue Limited, which provided alternatives to insolvency practitioners.

With the introduction of new laws in 2021, the IS has greater power to tackle company directors who dissolve businesses to evade debts.

Directors found guilty of improper conduct can face up to 15 years of banishment or more serious legal repercussions.

Azets warns that engaging rogue insolvency advisors could significantly heighten the risk of breaching these laws.

Rob Young, a partner at UK top ten accountancy and advisory firm Azets, said: "It is very concerning that some directors are engaging the services of unlicensed advisors, often in the belief that they can abdicate themselves of financial and legal obligations.

"Unlicensed advisors tend to use social media and direct marketing to target businesses that may have encountered financial problems with an offer to buy the business share capital and relieve directors of their liabilities and any debts.

"The promises made are often completely false, but we estimate that several hundred businesses have engaged the services of these unlicensed advisors over the last five years, putting many directors at risk of further action months or even years in the future.

"Our advice to any businesses experiencing financial difficulty is to engage the assistance of a licensed insolvency practitioner. Legal obligations cannot be simply sold away and the best approach is to tackle issues promptly and to do so with the support and advice of a licensed professional. Business owners should be wary of any advisors who seek to avoid engaging with a licensed IP."