Can a disqualified director be a shareholder?

The director disqualification regime applies to all directors.

A director is not precisely defined in legislation but refers to all individuals who hold the position of director by whatever name called (section 250 Companies Act 2006). This includes:

i) De Facto Directors – directors who are held out as directors or perform functions which could only be carried out by a director, but who are not formally recorded as director in the Company’s statutory records and at Companies House;

ii) Shadow Directors – those individuals who whilst not openly acting as a director may instruct the company’s directors in the performance of their duties and the direction of the company. This is defined by Section 251 Companies Act 2006;

ii)  Corporate Directors – i.e. companies who sit on the board of directors and are appointed as such;

iv) Directors of corporate directors;

v)  Non-executive directors – whose responsibilities in respect of the management and direction of the company, including its financial affairs, are no different to that of appointed De Jure directors;

If shareholders act in any of the above ways it will be extremely difficult to distance themselves from any allegations of unfitness as a director in director disqualification proceedings. As such, all individuals involved in the management of a company must be aware of what their role is and whether it is conduct that could only be performed by a director. Otherwise it could be a director disqualification breach and lead to a penalty.

Contact expert director disqualification solicitors now for advice

Please contact one of our friendly expert director disqualification solicitors now for your consultation. At Francis Wilks & Jones, we have over 50 years’ of combined legal expertise in director disqualification claims.  Feel free to review our website and the many different examples of cases we have successfully assisted our clients on.


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