A Manchester business manhas been disqualified as a company director for eight years after running an IT consultancy while he was still bankrupt. This article explains what he did, why this type of misconduct leads to director disqualification, what the Insolvency Service uncovered and what directors should do if they face similar allegations.
What conduct led to this Director Disqualification?
The Insolvency Service found that the man acted as a director of his company between July 2013 and July 2015 while he was still subject to a bankruptcy order made in July 2005. His bankruptcy was not annulled until November 2015.
Despite filing paperwork suggesting that his directorship ended in July 2014, the Insolvency Service established that he continued to act as an active director until at least July 2015. Acting as a director while bankrupt is a clear breach of the legal restrictions placed on bankrupt individuals and is a common ground for director disqualification.
The company traded as an information technology consultancy and operated under several names, including Digital London Limited and We Are AD Limited, before becoming SDRW Limited shortly before entering liquidation in March 2016 and final dissolution in September 2018.
What did the Insolvency Service say about the Director Disqualification?
Dave Magrath, Director of Investigation and Enforcement Services at the Insolvency Service, commented:
“When someone is declared bankrupt, they are banned from running companies. This is to protect the public and creditors from people who may have failed to manage their finances properly.”
This director …“ignored this and ran a company for two years while he was still bankrupt. Our investigation showed he was actively involved in managing the business when he was not permitted to be.”
He added that the Insolvency Service will pursue misconduct cases, such as this one, thoroughly and will see them through to completion.
Were there other issues relevant to the Director Disqualification?
Yes. In a separate matter, the businessman received a 22-month prison sentence in October 2024 for contempt of court. The court found that 60 companies controlled by him and his associates had been transferred to two British Virgin Islands entities in breach of freezing orders obtained by Barclays Bank.
The Insolvency Service has confirmed that further investigations into Dylan remain ongoing.
Neil Davies comments on Director Disqualification bans for acting while bankrupt
“Acting as a director while bankrupt is treated with the utmost seriousness by the Insolvency Service. Bankruptcy restrictions exist to protect creditors and the public. Ignoring those restrictions is viewed as deliberate misconduct and will almost always result in a lengthy director disqualification.
This case shows that the authorities will take action even where the conduct occurred many years earlier. Directors must understand their legal status at all times and must not involve themselves in the management of a company if they are prohibited from doing so.”
What should directors do if facing a Director Disqualification investigation?
Directors who receive correspondence from the Insolvency Service should seek advice immediately. Early intervention is critical. At NDP, our director disqualification solicitors specialise in defending directors under investigation, challenging proposed undertakings and protecting reputations.
Not every breach or allegation results in a director disqualification. There are often explanations and mitigating factors that need to be presented clearly and in context. Our team has a strong record of persuading the Insolvency Service to reduce the length of a proposed ban or to drop investigations entirely.
Contact us, or call 0121 200 7040, for a confidential, no obligation free of charge initial discussion.
Director Disqualification FAQs
What is Director Disqualification for acting as a director while bankrupt?
It is a ban imposed when a person manages a company while subject to a bankruptcy order or bankruptcy restrictions. It is both a civil breach and a criminal offence.
How long can a director disqualification last?
Bans range from 2 to 15 years depending on the seriousness of the misconduct. Acting as a director while bankrupt is treated as a serious matter and often attracts a ban in the higher part of the tariff.
Can directors defend a Director Disqualification case?
Yes. Specialist solicitors such as Neil Davies & Partners can challenge the Insolvency Service’s allegations, negotiate reduced undertakings or persuade the authorities not to proceed.
Why is acting as a director while bankrupt taken so seriously?
Bankruptcy restrictions exist to protect creditors and the public. Ignoring them is viewed as deliberate misconduct and a breach of trust.
