Director Disqualification – the additional consequences

There are statistics that state that 1 in 20 Directors of companies that went into liquidation, administration or receivership were later disqualified from acting as a Director.

The consequences of the disqualification extends further than just the role of Director. 

The prohibitions also include acting as one of the following:-

• * Money Advisor
• * Financial Intermediary
• * Social Landlord
• * Local Medical Service Contract Provider
• * Local Dentist Service Contract Provider
• * Trustee of a Charity
• * School Governor
• * Pension Trustee
• * Member of the Health Care Board
• * High Court Enforcement Officer

There is also the risk of getting prosecuted in the criminal courts for breaching the disqualification order with a guideline sentence of 6 months immediate imprisonment for cases which do not involve dishonesty.

For those who perhaps thought there were shortcuts around the rules, they need to think again. Someone acting on the instruction of the disqualified Director, knowing of their disqualification can lead to both being personally liable for a company’s debts.

The rules do not apply if the individual becomes a sole trader and where therefore any liability is taken personally without the status of protection afforded by a limited entity.

For assistance in negotiating with the Secretary of State on the Undertakings before a disqualification order or for an application to the court to approve a specific role or appointment post disqualification, please contact our Dispute Resolution Team.