Acting as a Director whilst disqualified
Once a director has been banned from acting as a director, he or she must take no part whatsoever in the direction or management of a company for the duration of the ban. The maximum length of time for a director disqualification is 15 years.
If the disqualified does act as a director whilst disqualified, that is a criminal offence, and a very serious one, as section 13 of the Company Directors Disqualification Act 1986 shows:
“If a person acts in contravention of a disqualification order or disqualification undertaking or in contravention of section 12(2), 12A or 12B, or is guilty of an offence under section 11, he is liable….
- on conviction on indictment, to imprisonment for not more than 2 years or a fine, or both; and
- on summary conviction, to imprisonment for not more than 6 months or a fine not exceeding the statutory maximum, or both.’
The Reality
The reality is that it is quite easy to breach and fall foul of a Disqualification. All a director needs to do to breach a ban is to act in the ‘management’ of a limited company. This is relatively easy to do, especially inadvertently, because ‘Management’ is a very widely defined term.
In addition are the ‘roles’ of a shadow director or a de facto director. Here, the director will be heavily involved in the running of a company without being listed as a director at Companies House. Both qualify as acting as a director whilst disqualified.
The Insolvency Service is the investigating Regulatory body.
One key area that we can advise on when a director receives a ban is to apply to the Court for permission to act as a director whilst disqualified. Alternatively, we can issue an application for a Court declaration that a current role, post disqualification, does not breach that order.
Contact us if you are being investigated for Acting as a director whilst disqualified
If you are being investigated by a regulatory body for acting as a director whilst disqualified, please get in touch immediately. We have the experience and expertise to challenge the investigation, prepare a defence and communicate with the Insolvency Service effectively.
