Investigating company director misconduct

You can either contest the allegations in court, which could lead to a disqualification order or you can provide a voluntary disqualification undertaking, putting an end to court action.

If you’re involved in disqualification proceedings, you could be banned from being a director of a limited company or even involved in the running of a company, for anywhere between 2 and 15 years.

In addition to being subject to a range of disqualification restrictions, your details will be published online on GOV.UK and if you are found to breach your restrictions, you could be fined – or worse still – sent to prison for up to 2 years.[1]

Read more about company director disqualification and the role of the Insolvency Service.[2]

Substantial disqualification

Boardroom graphic

The average length of a disqualification is about 5 and a half years, but there are occasions where directors will receive even longer bans. Between 2018 and 2019, 70 people received Section 6 disqualifications – bans for unfit conduct in relation to an insolvent company – of between 11 and 15 years. We call these bans ‘substantial disqualifications’. 

Although the majority of them were 11 or 12-year bans, 6 people did receive the maximum 15-year term. 43% of the substantial disqualifications in 2018-19 involved some form of tax misconduct, such as VAT fraud. Other examples of misconduct I’ve investigated included dubious investment schemes and directors breaching a previous ban.

The types of industries the directors and their companies were connected with varied, covering construction, retail, food and drink, real estate and technology. 

Making the bans public

When we write to directors informing them that we believe they haven’t followed their legal responsibilities, we outline that we may take the decision to publicise their disqualification and the reasons for the ban.

All disqualifications are publicised on the Companies House disqualified directors register. Where we believe it’s in the public interest for people to know about a director’s misconduct and we want to deter other directors from committing the same offences, we will send out a press release before publishing it on GOV.UK. We also use our social media channels – Twitter and LinkedIn – to engage with a wider audience.[3][4][5]

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