What is Director Disqualification and How Can it Affect You?
When a company goes into administration or liquidation, there will be investigations to find out the exact reasons for this, whether it is a specific person or the general actions of a company.
During the investigation, the director of the company will also be thoroughly investigated in case there are any issues of misconduct or a failure to fulfil any legal duties required for the company by law.
If issues do arise, then a company director can be faced with director disqualification, which prohibits them from acting as a company director for up to 15 years. In more serious cases, the offender may even be faced with a prison sentence.
What are the primary reasons for disqualification?
Disqualification may be deemed the correct solution after insolvency for many reasons. The top reasons include:
- Criminal matters
- Misappropriation of assets
- Technical matters
- Accounting matters, such as insufficient records
- Allowing trading to continue when debts can’t be paid
- Using company money for personal use
- Not paying tax
Any of these reasons will deem a director unfit for the position and will result in disqualification if ruled so by the court. Out of these examples, the ones most likely to land a director with disqualification are not paying tax and for mistreatment of the Crown, which includes continuing to trade even when there are unpaid debts that cannot be paid off.
What are the restrictions that come with a disqualification?
A ruled disqualification will not only prohibit a director from operating as a business or company director for a maximum of 15 years, but it will also restrict them from acting as barrister, solicitor or even accountant. It can greatly hinder job prospects afterwards.
As a disqualified director, your trustworthiness will be heavily questioned, meaning your eligibility to work with schools or charity will also come under scrutiny.
For the first three months after the disqualification, your details will be included in the Insolvency Service register. This type of disqualification does not go by quietly or privately.
What can you do if you are threatened with disqualification?
If you have been threatened with disqualification and believe it is for unfair reasoning, then you do not have to settle for this, and you can get justice.
Expert solicitors, such as NDandP director disqualification solicitors, can advise you and support you with your case. They know the Insolvency Service well and will use their expertise and knowledge to combat your disqualification.
These types of solicitors know full well how a director disqualification can impact a director’s life, both personally and professionally. If you have spent years honing your craft and developing your career, a disqualification like this would grind it to a halt and completely wipe out your future career prospects as well. Specialist solicitors know the process inside and out and will be dedicated to winning your case for you.
With the help of an expert, you can craft your defence with the knowledge you need to make sure your future is not affected.
