The Consequences of not applying for permission to act as a Company Director when already disqualified are serious.
A recent Director Disqualification case involved a bankrupt and disqualified company director called Trevor Lawrence (aka as Trevor Fail), who was sentenced to 27 months in prison at Nottingham Crown Court on 14th July, 2014. He had pleaded guilty to acting as a shadow director of four separate building companies whilst being disqualified as a director from a previous conviction in 2007.
Mr. Lawrence also pleaded guilty to 7 other related offences including 3 counts of fraud with the Judge also disqualifying him from acting as a director for a period of 7 years. Ian West, the Deputy Chief Investigating Officer from the Department of Business and Skills called the case a blatant example of offending, and stated that the Insolvency Service and the DBIS will always take firm action when they find companies being run in breach of their disqualifications.
We were not involved in the case, however, as a general comment it does reinforce the point that the consequences of already disqualified directors NOT applying for permission to act as a director in a new/different company are serious. So if you have an applying for permission issue or any director disqualification problem, contact us now or call 0121 200 7040 for a free initial consultation.
This is a summary of what the court heard
Trevor Lawrence was adjudged bankrupt for a second time in July 2007 as Trevor Fail – his first bankruptcy having been in the name Trevor Lawrence – and was no longer allowed to run a limited company. In September 2007, he was disqualified from acting as a director of a limited company for a period of nine years as a result of his conduct as a director of another building company, Silverstar Construction Ltd, which had been wound up in September 2006.
Between July 2007 and June 2011, despite being disqualified as a director, he acted as a shadow director and continued to manage the following building companies: Astone Building Solutions Limited, All Seasons Building Solutions limited, Acorn Building & Construction Limited and Gadsby & Fay Limited.
It was not suggested that these companies were completely fraudulent. Building work was clearly undertaken but there are insufficient records to determine what proportion of that work was carried out, or not carried out and to what standard.
The court also heard that:
- For All Seasons Building Solutions Limited (‘All Seasons’), Mr Lawrence produced a glossy marketing brochure to help secure contracts. However, the brochure was all lies. It showed a well-established (and unconnected) company operating from premises in Richmond, Surrey. One customer engaged the company’s services to build an extension to her home and paid £27,000 in advance. Little progress was made and when Trevor Lawrence failed to return her calls she attended at the registered office in Richmond only to discover All Seasons did not and never had had its registered office in the building. The client also discovered that others had been trying to contact All Seasons at that address for work which had apparently been uncompleted. All Seasons subsequently went into liquidation.
- On behalf of Astone Building Solutions Limited, Trevor Lawrence submitted invoices to one client with a total claim for VAT amounting to £30,000 despite the company never having been registered for VAT.
- The last company, Gadsby & Fay ltd, went into went into administration in June 2011, leaving contractors unpaid to the value of £60,000.
- From September 2007, Trevor Lawrence also engaged in business as a sole trader under the business name of Allbright Building Solutions. He took substantial deposits from two customers, and in breach of his bankruptcy restrictions, used a name other than that which he had been adjudged bankrupt and failed to inform them of his bankruptcy status. As with the limited companies, he failed to progress the building works and two customers lost £30,800 between them.
Please click here to see the full report of this case on The Insolvency Service’s website.