Being disqualified as a director is an extremely serious matter. If you fail to comply with the terms of your ban, you could be ordered to pay a hefty fine or even sent to prison. Accordingly, understanding the scope of your disqualification is essential. If you have any questions, such as ‘Can a disqualified director be a shareholder?’, you must take legal advice before proceeding to avoid inadvertently contravening your ban.
At Altion Law, our specialist director disqualification solicitors have vast experience in this niche area of law. We offer pragmatic, commercially focused, and cost-efficient legal advice on all aspects of director disqualification and are on hand to provide the support and guidance you need.
For a confidential free discussion, call us today on 01908 414990, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
What are you not allowed to do if you are disqualified from being a director?
If you are disqualified from being a company director, you must not do anything that amounts to acting as one. You must resign from all current appointments and refrain from taking up any new ones while your ban is in place.
You may also be unable to take on other roles, such as the following:
- The role of a pension trustee.
- A role on the board of a school, police authority, or charity.
- The role of a solicitor, barrister, or accountant.
- A role on a social care body or health board.
- The role of a registered social landlord.
Does this mean you cannot be a shareholder if you are disqualified from being a director?
The short answer is that you can still be a company shareholder if you are disqualified from being a director. Shares are personal property, and being a shareholder is entirely separate from being a director.
Directors are the people responsible for the day to-day running of a company. They make key operational decisions, such as those relating to the company’s strategic direction and hiring and firing staff. Shareholders, on the other hand, own the company since they invested in it through the purchase of their shares. While they have the right to vote on certain matters, such as approving a director’s loan, they are not generally entitled to a say in how the company is run.
Problems can arise when the role of a director and shareholder become blurred, and a shareholder who is disqualified from being a director becomes involved in the control or running of a company. In these cases, they may be deemed to be acting as a ‘de facto’ director, which is someone who takes on the role of a director even though they have not been officially appointed as one. Acting as a de facto director will constitute a breach of your disqualification terms, for which you may be fined or even imprisoned.
Examples of the types of acts that may amount to a breach of your ban include the following:
- Controlling what the company directors do and how they run the company.
- Making decisions relating to staffing.
- Meeting with third parties, such as customers or suppliers, on behalf of the company.
- Controlling the company’s finances.
If you are a shareholder of a company while disqualified from being a director, you must tread carefully. It is sensible to seek advice and guidance from experienced director disqualification solicitors like ours before doing anything that may be deemed as acting as a de facto director and contravening your ban.
How we can help
Our director disqualification solicitors specialise in assisting company directors facing disqualification or navigating their disqualification orders. We can represent you in connection with a wide variety of matters, including the following:
- Advising on whether your conduct warrants disqualification.
- Advising on the likely terms of your disqualification, including its length.
- Advising whether there are any factors in your case that may give rise to a defence.
- If we believe you may have a defence to the allegations, gathering evidence in support of your position.
- Negotiating a settlement.
- Representing you in court proceedings.
- Seeking the most lenient terms possible if disqualification is inevitable.
- Advising on the scope of your disqualification and whether any proposed acts will contravene it.
- Applying to court for permission to do certain things that would otherwise breach the terms of your disqualification.
We offer all clients a free, no obligation initial call with an experienced director disqualification solicitor. During the call, we will consider your case, advise on your legal position, and explain your options. We understand how stressful facing disqualification as a director can be. We will take swift, decisive action to protect your position and do everything we can to avoid a disqualification order being made or at least secure the most lenient terms possible.
For a confidential free discussion, call us today on 01908 414990, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
