What Is Director Disqualification?
Director disqualification in the UK is a legal restriction preventing individuals from acting as a director of a company for a set period, usually between 2 and 15 years. It is enforced under the Company Directors Disqualification Act 1986 and typically results from misconduct, financial mismanagement, or insolvency-related issues.
Once disqualified, an individual cannot:
- Be involved in forming, running, or managing a company.
- Act as a director of any UK-registered company.
- Influence company decisions indirectly through other directors.
Reasons for Director Disqualification
Directors can be disqualified for various reasons, including:
- Wrongful or Fraudulent Trading – Continuing to operate when a company is insolvent.
- Failure to Keep Proper Accounting Records – Not maintaining financial transparency.
- Tax Evasion or Non-Payment of Taxes – Persistent failure to pay HMRC liabilities.
- Unfair Treatment of Creditors – Prioritising payments to certain creditors over others.
- Breach of Fiduciary Duties – Acting against the company’s or stakeholders’ interests.
- Personal Misconduct or Criminal Activity – Engaging in fraud or illegal business practices.
Consequences of Director Disqualification
- Ban from Directorships – Cannot be a company director for up to 15 years.
- Personal Liability – May be held responsible for company debts.
- Legal Penalties – Fines, lawsuits, or even up to 2 years in prison for breaching disqualification orders.
- Reputation Damage – Public record of disqualification affecting future business opportunities.
Can You Appeal or Get Permission to Act as a Director?
If you have been disqualified, you may apply for permission to act as a director under Section 17 of the Company Directors Disqualification Act 1986. The court may grant permission under strict conditions, such as financial oversight measures or appointing independent directors.
Alternatively, you can:
- Challenge the disqualification if evidence proves it was unfair or incorrect.
- Negotiate an Undertaking – Agreeing to voluntary disqualification may reduce the length of the ban.
How Fraser Bond Can Help
At Fraser Bond, we assist disqualified directors in understanding their legal options and exploring ways to restructure businesses, invest in property, or seek financial recovery. Whether you need advice on company law, property assets, or restructuring strategies, our experts can guide you.
Need Help? Contact Fraser Bond Today
If you’re facing director disqualification, don’t navigate it alone. Speak to Fraser Bond for expert advice on business solutions and property investment opportunities.
