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Breaching The Terms Of An Existing Director Disqualification

Director Disqualification for Allowing Another Person to Breach the Terms of an Existing Disqualification. 

A recent press release from the Insolvency Service regarding a director disqualification case, in the words of Robert Clarke, Group Leader of Insolvent Investigations North at the Insolvency Service, sends a clear message to directors, that:

“….if they act as a director when not allowed to do so, allow others to continue to run limited companies whilst disqualified or fail to comply with statutory obligations to pay the Crown, The Insolvency Service will investigate you and you could lose the protection of limited liability.”

In this case, two directors and a third already disqualified director gave disqualification undertakings not to act as directors of companies. Having carried out an investigation the UK Insolvency Service (‘IS’) were able to obtain evidence that two directors of companies had allowed a further individual who was already disqualified as a director to act as a director in the management of companies (whether that be as a shadow or de-facto director).

In addition the IS investigation found that the directors allowed a total of £976,640.00 to be owed to HMRC.

Combined Director Disqualification of 24 years

The consequences were severe and the directors were disqualified by way of accepted undertakings for a combined total of 24 years.  This included the already disqualified director being disqualified for a further 10 years and the other two directors being disqualified for 8 and 6 years respectively.

The already disqualified director is now at risk of being criminally prosecuted and HMRC and the other creditors could apply to Court to make him personally responsible for the debts of the companies .

The other two directors are also at risk under section 15 of the Company Directors Disqualification Act of being made personally responsible for the debts of the companies, as directors of companies who act or are willing to act on instructions given without the leave of the court by a person whom they know at that time to be the subject of a disqualification order made, or disqualification undertaking accepted, under the Company Directors Disqualification Act 1986.

We are Director Disqualification Solicitors

As is always the case if you are being investigated by the UK Insolvency Service or you are facing claims brought by liquidators or creditors and are facing director disqualification proceedings then the earlier that you speak to us, as specialists in director disqualification, the more likely it is that we can assist.

Please contact us or call us today, on 0121 200 7040 for a free, no obligation initial chat.

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