You can be banned (disqualified) from being a company director if you failed to meet your legal responsibilities or directors’ duties.
In more detail
Unfit conduct for a company director includes:
- Allowing a company to continue trading when it cannot pay its debts as they fall due
- 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
An administrator has to submit a completed questionnaire to the Insolvency Service which answers questions on the directors conduct. If the Insolvency Service thinks that conduct falls short it will investigate your company and the directors conduct and if that investigation finds unfit conduct the Insolvency Service will advise you in writing of:
- What they think you have done that makes you unfit to be a director
- How they intend to start the disqualification process; and
- How you can respond
You should obtain legal advice if you get a letter about disqualification from The Insolvency Service.
In extreme cases directors can be disqualified for up to 15 years and during this time you cannot be a director of a UK registered company or an overseas company with UK connections or be involved in forming, marketing or running a company. If you breach the terms of a disqualification undertaking or order you could be fined or sent to prison for up to two years. Notice of you disqualification will be published on in the Companies House database of disqualified directors.
If you take professional advice early and follow that advice it is very unlikely that you would get disqualified. Disqualification is really reserved for directors that behave very badly. If in doubt you should most definitely take immediate advice – speak to one of our experts who can help. Contact us today on 0800 254 5494