The Impact of Restraint Orders on Businesses

A restraint order is a powerful tool under the Proceeds of Crime Act 2002 (POCA), allowing the authorities to freeze a person’s assets during a criminal investigation. Although restraint orders are made against individuals suspected of benefiting from criminal conduct, they often have serious consequences for you or your business, particularly where the individual is a director, shareholder or plays a central role in management.

The impact can be immediate and severe. Financial accounts that have been frozen, operational restrictions and reputational fallout can destabilise even well-run businesses with no direct involvement in the alleged wrongdoing. The consequences go far beyond the impact on the person and can put the stability of a business at risk, making early legal advice essential.

In this guide, the specialist restraint order solicitors at JMW explain the ways a restraint order can affect a business and what can be done to limit disruption and protect commercial interests.

What is a restraint order and how can it affect a business?

Restraint Orders are made by the Crown Court, often at the request of the Crown Prosecution Service, Serious Fraud Office, or HMRC to prevent individuals under investigation from dealing with assets that may be linked to criminal conduct. These orders are typically made without notice (ex-parte) to the individual they are made against and can cover a wide range of financial interests, including those held jointly or through a business structure or overseas. 

Although the business itself may not be under investigation, its operations can be affected if a key person within it - such as a director or major shareholder, is subject to the order. From that point on, the ability to access bank accounts, pay suppliers or manage finances may be restricted.

Business bank accounts and access to funds

The freezing of accounts is often one of the most immediate and damaging effects of a restraint order. If the order covers company-held funds - or if the accounts are jointly operated - the business may lose access to critical working capital.

Payments to staff, suppliers, landlords and creditors may be delayed or missed. Direct debits and standing orders can fail. Where day-to-day liquidity is restricted, a company can quickly become unable to meet its financial obligations - putting contracts, licences and relationships at risk.

Even where the restraint order applies only to an individual, investigators may seek to freeze business accounts if they believe the subject has control over or a beneficial interest in them.

Jointly held assets and ownership structures

Restraint orders are drafted broadly and may include assets held jointly by the subject and others - including property, vehicles or corporate bank accounts. In a business context, this can affect partnerships and small companies where ownership and operational control are shared.

The court does not need to make findings of guilt to grant or maintain the order; among other matters, it is enough that there are reasonable grounds to suspect the individual has benefited from criminal conduct. This can even be prior to a charging decision being made.  That threshold may be enough to entangle innocent business partners and lead to the freezing of assets they rely on to trade.

Where personal and business assets are mixed, or where companies are used as holding vehicles, the risk of business disruption is higher. That is why timely legal advice is critical.

Disruption to trading and commercial relationships

The effect of a restraint order goes beyond bank accounts. The reputational and operational consequences can affect every aspect of the business. Suppliers may refuse credit terms or clients may pause or cancel contracts. Insurers and lenders may seek reassurances or trigger clauses in commercial agreements.

Where a company is unable to meet obligations due to frozen assets, its contractual standing may be called into question - even if the company itself is not subject to proceedings. Delays in payroll, service delivery or debt repayment can compound the impact and there could be further contractual and financial penalties associated with that.

In sectors where reputation is closely tied to regulatory status or market confidence, this can quickly escalate from an operational issue to a crisis of business continuity.

Directors, shareholders and personal restraints

When a company director or major shareholder is subject to a restraint order, the consequences for the business can be far-reaching. The order may restrict their ability to authorise payments, make financial decisions or continue day-to-day involvement.

This creates risk under both company law and regulatory frameworks. Directors have ongoing duties to act in the interests of the company, but may be legally unable to fulfil them if they are subject to a restraint order. This can leave gaps in governance, decision-making delays and internal disputes if other board members disagree on how to proceed.

In some cases, it may be necessary to consider temporary changes to directorships, access rights or authorisations to preserve business continuity.

Third-party exposure and tracing of assets

A restraint order may trigger a broader review of how money has moved through the business, especially if investigators believe it has been used to disguise or transfer proceeds of crime.

This can lead to requests for disclosure of financial records, scrutiny of historic transactions, or even interviews with staff and directors not directly under suspicion. The business may be drawn into proceedings as a third party, particularly if it is holding or has received funds linked to the subject of the order.

The mere perception of involvement can have commercial and regulatory consequences, even in the absence of wrongdoing.  For businesses wrongdoing can include having done nothing at all.

Accessing frozen funds for operational costs

Where the business cannot function without access to certain funds, it may be possible to apply to the court to vary the restraint order. This can allow specified payments to be made for essential expenses - such as rent, wages or tax liabilities.

However, the court will require detailed evidence of the business’s position, the nature of the costs involved and confirmation that the payments do not risk dissipation of criminal property. These applications must be carefully prepared by a solicitor, and supported by financial documentation, including bank statements, contracts and projected outgoings.

If successful, the variation may offer limited relief to stabilise the business until wider proceedings are resolved.

Reputational damage and regulatory impact

Being connected to a criminal investigation - even indirectly - can affect a business’s reputation, particularly in regulated sectors. Clients, stakeholders or the press may become aware of proceedings, especially if court hearings are listed publicly or reported in the media.

This can trigger wider consequences, such as the review of licences, increased scrutiny from compliance departments or suspension of contracts pending investigation outcomes. Regulated professionals within the business may also face questions from their supervisory bodies.

A clear communication plan and legal strategy can help protect the business’s standing while the matter is ongoing.

Confiscation risks following conviction

If the person subject to the restraint order is convicted, confiscation proceedings may follow. These are civil in nature but can lead to the enforced sale or forfeiture of assets, including those connected to a business.

The Crown may argue that certain company assets represent the proceeds of crime, or that the business itself has benefited from criminal conduct. This may put business property at risk, especially if the company is closely tied to the defendant’s personal finances or trading history.

In some cases, the business may need to take part in the confiscation proceedings to demonstrate that its assets are legitimate and not connected to the alleged criminal benefit or provide evidence to show that it has an interest in assets which are at risk of confiscation. 

How JMW can help you respond

JMW advises businesses and individuals affected by restraint orders linked to criminal investigations. These orders often arrive without warning, freezing assets and creating immediate uncertainty around how the business can continue to operate.

We act quickly to assess the impact, provide clear guidance on your legal position and help you respond in a way that protects both short-term operations and long-term commercial interests.

We support clients by:

• Reviewing the company’s financial structure to identify affected accounts, assets and liabilities.
• Clarifying ownership and control, particularly where assets are held jointly or through layered corporate structures.
• Assessing governance risks and advising on interim adjustments to management or authority if a director is subject to the order.
• Identifying critical business expenses and preparing the evidence required to support a variation application to access funds for things like wages, supplier payments or other essential outgoings.
• Advising on the legal scope and implications including which assets are covered and who else may be affected.
• Seeking clarity from the court where the scope or application of the order is unclear.
• Managing third-party exposure where business partners, employees or related entities are drawn into the process.
• Preparing for confiscation proceedings and working to protect company assets from being treated as proceeds of crime.

Taking early, informed steps reduces uncertainty, helps manage exposure to risk and supports business continuity. It also puts you in a stronger position to deal with further developments as the investigation progresses.