Being disqualified from acting as a company director under the Company Director Disqualification Act can have disastrous consequences for your career and reputation. The sanction prevents you not only from acting as a company director, but also from forming, marketing, or running a company for a period of up to 15 years. If you break the terms of your disqualification, you may be fined or sent to prison for up to 2 years.
If you are facing director disqualification, prompt legal advice is crucial. Our experienced director disqualification solicitors have the expertise and experience needed to defend or overturn your disqualification or at least reduce its scope. We couple our technical legal excellence with a decidedly commercial approach, gleaned from our experience working for leading corporations and government bodies. We are straight-talking and to the point, explaining where you stand and your options in plain English.
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 is the Company Director Disqualification Act?
The Company Director Disqualification Act is the primary piece of legislation governing director disqualifications in the UK.
Most director disqualifications arise in the context of insolvent companies. On the commencement of formal insolvency proceedings, such as administration, voluntary liquidation, or compulsory liquidation, the insolvency practitioner responsible for the process is obliged to investigate the company’s affairs, including the conduct of its directors. If the insolvency practitioner identifies unfit conduct, the director in question may face disqualification to prevent them from acting in the same way in the future.
Behaviour by a director that may constitute ‘unfit conduct’ includes the following:
- Allowing the company to continue trading when you are aware that it is insolvent.
- Failing to ensure the company meets its tax liabilities.
- Failing to maintain proper accounting records.
- Drawing illegal dividends.
- Using company money or assets for your personal benefit.
- Not filing the necessary documentation at Companies House.
- Hiding or disposing of company assets.
- Non-cooperation with the insolvency practitioner.
What happens if you are disqualified as a Director?
If you are disqualified as a director, you cannot be a director of a company or involved in forming, marketing or running a company for the duration of your ban. The ban may last for a period of up to 15 years, depending on the severity of your actions. Generally speaking, less serious unfit conduct tends to result in a disqualification for between 2 and 5 years, more serious unfit conduct results in a disqualification for between 6 and 10 years, and the most severe instances of unfit conduct result in disqualification for between 11 and 15 years.
If you do anything you are prohibited from doing during the course of your disqualification, you can face a fine or up to two years in prison.
In addition to being banned from acting as a director, you may also be restricted from carrying out certain other activities during your disqualification period, including the following:
- Being a registered social landlord.
- Being an accountant, solicitor, or barrister.
- Sitting on the board of a school, police authority, or charity.
- Acting as the trustee of a pension.
- Sitting on the board of a health or social care body.
Your details will be published online in the database of disqualified directors maintained by Companies House, and the Insolvency Service’s register of disqualified directors.
Being disqualified from being a director does not affect the individual merely while their ban is in place; it can severely impact their career permanently. If potential business partners, investors, and employees become aware of the fact that you were found to have acted improperly in connection with a previous business venture and disqualified from being a director, they may be reluctant to work with you due to concern over your ability and integrity.
In addition to facing disqualification, your conduct may render you personally liable for any financial losses sustained by the company or its creditors. Very severe cases may warrant criminal sanctions.
What should you do if you are facing Disqualification?
If you are facing disqualification as a director, you should seek timely legal advice from expert director disqualification solicitors like us. We will urgently review the circumstances of your case and advise on the best way to deal with the issue, which may be to defend the charges or voluntarily disqualify yourself to avoid court proceedings being commenced against you.
If we believe you have grounds to defend the allegations, we will do all we can to prove that the conduct in question was, in fact, appropriate in the circumstances and that disqualification is, therefore, inappropriate. We have vast experience in director disqualification cases, and a proven track record of securing excellent results or our clients.
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.
