{"id":6255,"date":"2019-07-30T10:19:03","date_gmt":"2019-07-30T09:19:03","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=6255"},"modified":"2022-03-07T12:20:15","modified_gmt":"2022-03-07T12:20:15","slug":"director-disqualification-and-how-it-can-affect-you","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/director-disqualification-and-how-it-can-affect-you\/","title":{"rendered":"Director disqualification and how it can affect you"},"content":{"rendered":"

Director disqualification can occur if a company director does not meet the legal responsibilities of their role, whether as a result of trading fraudulently, failing to submit annual accounts, or not paying tax owed by the company.<\/p>\n

Being disqualified means that an individual cannot be the director of any company in the UK, or any foreign companies operating in the UK for a fixed period of time. Such restrictions can have serious long-term repercussions and can potentially damage your career and reputation. Therefore, it\u2019s worth understanding exactly what director disqualification means and how it could affect you.<\/p>\n

Disqualification of a\u00a0director occurs most commonly when a company is continuing to trade whilst going into insolvency. In a smaller number of cases, however, directors are disqualified as a result of knowingly engaging in criminal behaviour.<\/p>\n Director Appointment and Resignation Service<\/span><\/a>\n \n

A director disqualification can last anywhere between two and fifteen years. It not only bans you from managing or setting up a company, but also from taking on other positions of trust.<\/p>\n

Government legislation means that it can also be costly to you on an individual level. If your company has gone into liquidation and has debts that need to be paid off, then you might also find yourself personally financially liable for those debts.<\/p>\n

What is director disqualification and who governs it?<\/h3>\n

Director disqualification means that you cannot act as a director or manage a company for the duration of your disqualification period. In addition, you cannot continue to act in the role of a director, even if you are not officially named as a director. The Company Director Disqualification Act 1986<\/a> (CDDA) is the principal piece of government legislation that governs disqualifications.<\/p>\n

The vast majority of director disqualification cases are due to company insolvency. If your company is reported to the Insolvency Service, they may open an investigation into either your company in general or you as its director. If they conclude you have neglected your legal responsibilities, they may apply to the courts to have you disqualified.<\/p>\n Appointing and removing limited company directors<\/span><\/a>\n \n

Other organisations and bodies which may investigate your conduct include Companies House, the Competition and Markets Authority (CMA), the courts or a company insolvency practitioner.<\/p>\n

You can be disqualified from acting as a company director if you fail to meet the legal responsibilities of the role. Anyone can report a company director for being \u2018unfit\u2019 by using the Complain about a limited company<\/a> feature on the Gov.uk website.<\/p>\n

Examples of unfit conduct include:<\/strong><\/p>\n