Directors' Disqualification

If you are a director of a company and are disqualified from acting as such, the consequences can be significant. You will no longer be able to act as a director without the prior approval of the court, and will not be able to be directly or indirectly involved in setting up or managing a company or limited liability partnership. A period of disqualification can last for many years, while the damage to your reputation can be irreversible. This can have a catastrophic effect on your career, your life and your family.

With your livelihood and reputation are at risk, you need to be certain that you can call on experienced legal professionals to offer the most robust defence strategy to any accusations made against you. The Regulatory and Compliance Solicitors at Wilford Smith have the required skills, knowledge and determination to ruthlessly develop a top-level strategy on your behalf, ensuring the best outcome in any case. If you find yourself subject to disqualification proceedings, call our Regulatory and Compliance Team today.

What is director disqualification?

Director disqualification means that an individual is barred from acting as a director, and from being involved in the formation, management or promotion of a company for between two and 15 years. The rules on director disqualification are set out in the Company Director Disqualification Act 1986 (CDDA). An individual will risk disqualification if they have been a director of a company that has entered insolvency, particularly if there are allegations of misconduct on the part of the company's directors.

Director disqualification proceedings are most commonly commenced under the provisions in the CDDA. While these proceedings can only be brought against directors, this is not restricted to directors who are registered at Companies House. An individual can be considered a director under the law, and as such can be subject to disqualification proceedings even if they are not registered at Companies House. Examples include individuals who are “de facto” directors or “shadow” directors.

Disqualification proceedings will normally have to be commenced within two years of the date of formal insolvency of a company, with the length of any disqualification reflecting the seriousness of the admitted or proven unfit conduct. These proceedings will have to demonstrate that a director has been involved in unfit conduct, or has allowed others to be involved in such conduct, which in most cases will have

resulted in the failure of the company. With regards to what represents “unfit conduct”, this will be determined by the facts of each individual case.

How can I prevent myself being disqualified as a director?

If a company of which you are a director is continuing to trade, but there are concerns regarding its solvency, it is vital to seek legal advice at the earliest possible stage to guard against the threat of disqualification in the future. Disqualification proceedings will only be initiated following the liquidation of a company, so getting the right legal guidance at this time can be fundamental in protecting your personal position. If the company enters formal liquidation, enquiries may be carried out by the Insolvency Service’s disqualification unit, and any disclosures made by you at this time may be used as part of any future disqualification proceedings. Consulting a solicitor experienced in director disqualification proceedings at the start of any investigation will be hugely beneficial when it comes to conducting any future defence.

Expert Director Disqualification Advice and Representation in Sheffield

With years of experience representing directors facing the threat of disqualification, the Regulatory and Compliance Solicitors at Wilford Smith are committed to providing you with an incredibly high-level service. We are experts in advising company directors who find themselves subject to allegations of misconduct, whether this is at the earliest stage of an investigation, following a decision to commence the director disqualification procedure or as part of other ongoing court proceedings.

We take pride in our reputation for unique representation, giving our clients a service that is exceptionally strategic and results driven, and are able to attract the highest calibre barristers to provide support when necessary. The Regulatory and Compliance Team at Wilford Smith know how distressing it can be to be threatened with disqualification from your position as a director, and will ensure that you are given clear, sympathetic and straightforward advice as part of our client-focused and highly personal service.

Our Regulatory and Compliance Solicitors are based in Sheffield and assist clients throughout England and Wales. Contact us today on 0808 164 1349 to find out how we can help.