How Does the Disqualification work? What is the Insolvency Service Role?

The Administrator, Or Liquidator Will Complete A D Return, or D Report On The Conduct Or Misconduct Of Directors.

The directors of any company which enters into Administration, or Insolvent Liquidation, will be the subject to one of these. This report, will be submitted to The Insolvency Service by the Administrator or Liquidator. An A D Return will confirm that there is no evidence of misconduct.
During formal proceedings for Insolvency, an Administrator or Liquidator will send a D Report to the Secretary of State. This report, will detail the misconduct of all directors in office during the last 3 years of the company’s trading. It is possible even if you have resigned as a director, you will be part of the investigation for the Director Disqualification and the insolvency service role in this Order.

The Insolvency Service Then Carries Out An Investigation Of Your Company And Your Conduct.

The Insolvency Service (acting on behalf of the Secretary of State) will decide whether it is in the public interest to begin the investigation. The investigation will consider the actions of individual directors, and of the company. If you have received a letter from the Insolvency Service, you may have seen a threat of disqualification within it. When the questionnaire is received, it is important that it is carefully completed. The answers as may be produced in evidence. It will be requesting detailed answers to questions on the failed company, and your conduct as a director.

For a confidential free discussion, call us today on 01908 414990,  alternatively email us at or complete our Free Enquiry Form and we will call you back.

Notice Or Pre-Action Letter (Referred To As A Section 16 Letter)

The Insolvency Service will consider if it to be in the Public Interest that a director is to be disqualified or not. This will happen if they think you haven’t followed or met your legal responsibilities as a director. If this is the case, they will send you a notice in writing of their intention to commence proceedings, to disqualify you.

The Insolvency Service, will set out grounds on which the disqualification is to be pursued. Our experts can then advise you, and draft a response to the allegations made. The notice will set out:

  1. What the Insolvency Service think you’ve done that makes you unfit to be a director.
  2. If the Insolvency Service intends to start the disqualification process.
  3. How you can respond to all.
Top Tip: We recommend you seek legal advice at this point. In our experience, directors who choose to respond to The Insolvency Service themselves, without having considered legal advice, can often have a detrimental effect on their case.

Please See the Two Options Available for Disqualification Proceedings:

A) You can wait for The Insolvency Service to take you to court to disqualify you. Then you can defend the case in court, if you disagree with their findings.
B) Give The Insolvency Service a ‘disqualification undertaking’ – this means you voluntarily disqualify yourself, and it ends this action against you.

The second option given above, is worth while if you admit that you have acted wrongly. Meaning, that you are likely to receive lower penalty on the period of disqualification. 

It’s advisable to seek expert legal assistance in the negotiating the period. The terms of undertaking, will need to be carefully considered, and agreed by the director.  It is important also, to ensure that the terms given, do not leave the any director open to other civil, or criminal action.

For a confidential free discussion, call us today on 01908 414990,  alternatively emais us at or complete our Free Enquiry Form and we will call you back.