Company Fines - who pays?

[shed driver]

I often see news reports of businesses being fined large amounts of money
http://www.itv.com/news/meridian/2017-03-09/compan...

How are these fines paid? Is there some kind of insurance, do the owners/ directors pick up the bill?
What happens if the fine isn't paid?

SD.

[TooMany2cvs]

shed driver said:

I often see news reports of businesses being fined large amounts of money
http://www.itv.com/news/meridian/2017-03-09/compan...

How are these fines paid? Is there some kind of insurance, do the owners/ directors pick up the bill?

The company pays. The company might have bought some kind of insurance, but it's unlikely.

shed driver said:

What happens if the fine isn't paid?

Prosecution for non-payment. Increased fines. If the fines still aren't paid, then the creditor can push to appoint administrators. There may, ultimately, be prosecution of the directors personally.

[Countdown]

Effectively it's the shareholders.

[RDMcG]

It is very rare for directors to be in the hook personally and at least on this side of the pond we carry D&O insurance (directors and officers) in the event of any personal liability. This does not absolve one of liability for a criminal act such as bribes for instance. The company pays any fines levied against it directly in the normal course of business. The largest fines have been against banks stemming from the 2008 meltdown, BP , and the current mess at VW as I recall.

[Expatloon]

Countdown said:

Effectively it's the shareholders.

For the scumbag firm in the link there is only one £1 share and one share owner and according to the 2016 company accounts there were assets of ~£32k against debt's of ~£40k.

It's a limited company though so I would imagine it's in the process of being wound up as we speak and very likely will start up again the next day under a different name.

The £270k fine of course will never be paid !

[TwigtheWonderkid]

Insurance can be bought to cover defence costs and awards of civil damages, but criminal fines cannot be covered by insurance.