Virgin Racing has hardly set Formula One alight since the team joined last year. Now it seems that not only could it be ignominiously ejected from the sport but its directors, including team principal John Booth and two senior executives from government-owned bank Lloyds, risk being prosecuted.

The news comes courtesy of an article in the Independent by Pitpass' business editor Christian Sylt who reveals that Companies House, the UK's business authority, has said the directors could face prosecution proceedings tomorrow if they don't deliver key documents about the team.

Lloyds Development Capital (LDC), the bank's private equity arm, bought an undisclosed stake in Virgin Racing in 2009 and gave it a £6.5m loan according to documents filed by the team's parent, Manor Holdco. In November last year Russian sports car manufacturer Marussia bought a controlling interest in the company from LDC and Corvina Holdings, an investment vehicle owned by Sir Richard Branson's Virgin group.

The sale left LDC with a minority stake although its representatives occupy two of the six slots on the board of Manor Holdco. They are LDC's chief executive Darryl Eales and Carl Wormald, the head of its office in Manchester which is not far from the team's headquarters in Sheffield. On October 25 Companies House sent a notice of dissolution to them and all of the company's other directors including team principal John Booth and Marussia's UK managing director Andy Webb.

It was triggered by Manor Holdco failing to file its 2010 accounts which were due on July 28 this year. Under Section 1000 of the Companies Act, a company can be struck off for not filing accounts. The delay has already landed the company with a £750 fine and failing to file accounts is a criminal offence for which all the directors are liable. Manor Holdco was incorporated in late 2009 and has never lodged any accounts with Companies House.

In response to the dissolution notice, the directors committed to filing the accounts within four weeks and Companies House agreed to suspend its strike off action. "We normally put a hold on for 28 days," says a Companies House representative adding "28 days from the date that we suspended it, which was 26 October, is 23 November." However, the accounts have still not been filed and if this is not done by the end of Wednesday, Companies House says that the next step would be prosecuting the directors.

"If they've promised to file a document and they don't it will go through prosecution. They go through the courts for prosecution and if they don't bring it up to date they maybe could close the company down. So they've got until Wednesday really."

This could push Virgin Racing out of F1 since the company facing dissolution owns Manor Grand Prix Racing limited, the direct signatory to the Concorde Agreement, the contract which grants the team a slot on the sport's grid. Before Virgin bought into the team in 2009 it was called Manor GP, hence the name of the companies which own it.

The team joined F1 the year after Virgin's acquisition and it has failed to score a point since then. It currently lies last in the standings with one race remaining before the end of the season. Marussia and LDC declined to comment whilst a team spokesperson described the action as "a procedural communication from Companies House relating to the timing of the filing of accounts. We are comfortable with our situation and that the matter is being addressed."