Acting as a director whilst subject to a disqualification order is very serious indeed. The same is true of taking on management responsibilities akin to being a director. Our expert team has been dealing with claims like this since 2002 and have successfully defended many directors accused of breaching disqualification orders. Call us for help today.
Francis Wilks & Jones acted with great professionalism, responding quickly to my requirements, leading to an eventual withdrawal of the claim against me and my son. I am extremely gratefulA client who approached us just two weeks before the trial of a large director disqualification claim against him and his son
If you are disqualified – whether by court order or because you have given a disqualification undertaking to the Secretary of State – then upon agreeing to be disqualified a public record will be created to record this and notify the public.
Being disqualified prohibits you from acting as a director. In addition, it can impact your personal current or future circumstances, which we briefly touch on below.
Criminal proceedings for acting while disqualified
Where a director is disqualified and nevertheless continues to act as a director, then consequence of this is that they may be subject to criminal proceedings potentially leading to committal. At Francis Wilks & Jones we have seen a number of directors committed to prison for this reason.
- the steps taken as a director while disqualified do not strictly have to include misconduct (although they commonly do);
- any misconduct does not have to be severe (although all misconduct as a director should be avoided);
- a simple breach of the disqualification undertaking or disqualification order is sufficient to lead to this outcome (and often does).
Acting in management of company
The disqualified director may not necessarily be formally appointed as a director at Companies House and may be a de facto director or a shadow director, but the risk remains the same.
It is not uncommon, especially for small owner-managed companies, for shareholders to be regularly involved in the company’s management despite not being appointed as a director (especially where disqualified). In such circumstances, dependent on the nature of their role, they could be regarded as a director and, if acting in breach of a disqualification order or disqualification undertaking, become criminally liable for any such activities.
Obtaining court permission to act as a director despite being disqualified
However, where a director is disqualified for previous misconduct there may be a need or justification to give him/her leave to act as a director of a new, recently formed or other company.
The reasons for granting such court permission are widespread, but in summary act to balance out the requirement to protect the public interest with the desire to ensure this does not lead to the failure (and potential numerous employee redundancies) in respect of that same director’s new company.
Learn more about seeking leave / permission to be a director despite being disqualified.
At Francis Wilks & Jones we are specialists in director disqualification and have many years of experience in this field in the high court and court of Appeal. We also have lawyers with previous experience in the Insolvency Service and Treasury Counsel as well as a dual qualified chartered accountant with expertise in arguing accounting matters. Against this background we are the UK’s leading firm of director disqualification defence lawyers and will be able to provide you with timely, appropriate and value-added legal advice and assistance.
I was greatly impressed with the commercial, tactical and technical ability of the team at FWJ. They quickly got to grips with a complex set of facts and, through their hard work, had the proceedings against me dropped and a significant proportion of my legal fees repaid. I couldn’t recommend them highly enoughA director we defended against a disqualification claim and other claims brought by a liquidator