Company director disqualification

Company director disqualification

You can be banned (‘disqualified’) from being a company director if you do not meet your legal responsibilities.

Anyone can report a company director’s conduct as being ‘unfit’.

‘Unfit conduct’ includes:

allowing a company to continue trading when it can’t pay its debts
not keeping proper company accounting records
not sending accounts and returns to Companies House
not paying tax owed by the company
using company money or assets for personal benefit

You are not usually allowed to be a company director if you’re under restrictions from bankruptcy or a Debt Relief Order.

How disqualification works

The Insolvency Service may investigate your company (or you personally as a director of your company) if it is involved in insolvency proceedings or if there has been a complaint.

If they think you have not followed your legal responsibilities as a director, they will tell you in writing:

what they think you have done that makes you unfit to be a director
they intend to start the disqualification process

How you can respond:

You can either:

wait for The Insolvency Service to take you to court to disqualify you – you can defend the case in court if you disagree with The Insolvency Service
give The Insolvency Service a ‘disqualification undertaking’ – this means you voluntarily disqualify yourself and ends court action against you

You may want to get legal advice if you get a letter about disqualification from The Insolvency Service.

Apart from The Insolvency Service, other bodies can apply to have you disqualified under certain circumstances, e.g.:

Companies House

Competition and Markets Authority (CMA)

The Courts

a company insolvency practitioner

If you are disqualified

You will be disqualified for up to 15 years.

You cannot:

be a director of any company registered in the UK or an overseas company that has connections with the UK
be involved in forming, marketing, or running a company

You could be fined or sent to prison for up to 2 years if you break the terms of the disqualification.

Your details will be published online in:

The Companies House database of disqualified directors – your details will automatically be removed from the database when your disqualification ends
The Insolvency Service’s register of directors they got disqualified in the last 3 months, including details of why you were banned

You must ask a court for permission if you want to be a company director while you are disqualified. You can get help from a legal adviser.

Other restrictions

There are other restrictions if you are disqualified. For example, you might not be able to: