Company Directors Disqualification Act 1986

What happens if you breach a disqualification order

If you carry on acting as a director of a company whilst you are disqualified is very serious. It can lead to a much longer period of disqualification, personal compensation claims, and you could even be put into prison.

If you face being disqualified, whether that be by way of a disqualification order or a disqualification undertaking, then you need to plan your current company affairs well in advance of any such disqualification.

Here is a list of the serious personal risks you face if you are unaware of, or ignore, the disqualification :

• if your current company enters into insolvency, the legal position is that you will be personally responsible for all debts incurred by the new company (in insolvency) whilst you were acting as a director whilst disqualified;
• you only need to be registered as a director or taking decisions that only a director can take to be liable under this provision.
• acting as a director whilst disqualified, even if not recorded as one (the law no longer differentiates between a director registered at Companies House and someone who directs the company without holding him / herself out as a director) is a criminal offence punishable by up to 5 years in prison.

Although you may consider such punishment unlikely, we have experience of circumstances where individuals have been sent to prison for acting whilst disqualified.

We can assist you avoid these personal risks

If you act within a company but you ate not sure if your role is breaching the disqualification order, then we can help in the following ways:

• issue an application pursuant to Section 17 Company Directors disqualification Act 1986 for leave / permission to act as a director despite the disqualification; or
• issue an application pursuant to Section 17 Company Directors disqualification Act 1986 for leave to act in the management, promotion or formation of the company despite the disqualification; or
• issue an application for a declaration by the court that your role does not breach the disqualification