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.:
Competition and Markets Authority (CMA)
a company insolvency practitioner
If you are disqualified
You will be disqualified for up to 15 years.
- 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.
There are other restrictions if you are disqualified. For example, you might not be able to:
- sit on the board of a charity, school, or police authority
- be a pension trustee
- be a registered social landlord
- sit on a health board or social care body
- be a solicitor, barrister, or accountant