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Director Disqualification

We have an expert team of business solicitors on hand to deal with insolvency, and more specifically the repercussions of a company becoming insolvent. One possible outcome is the disqualification of the director, especially if they have been judged to have led the company into their current financial difficulty.

DPP Business & Tax can assist with the entire procedure of director disqualification, advising your business of best practice and how to proceed through the complex process of dismissal.

The disqualification procedure

If a company becomes insolvent it will usually enter into formal proceedings ran by an administration or receivership, where the director will be investigated to see whether they contributed to the financial mismanagement that led to the insolvency.

If it is concluded that they were at fault by the administration or receivership, the director will be referred to the secretary of state, where it will be decided whether it would be in the public’s best interest to disqualify the director, through an investigation called the D Report.

If it is decided action should be taken to disqualify the director, at least 10 days’ notice should be given and it must occur within 2 years of the original insolvency.

Effect of disqualification

If it transpires that a director was directly responsible for the financial difficulty that the company finds itself in, chances are he will be disqualified.

The result of a director being disqualified is that he is judged as unfit to run any form of business, and actually makes it a criminal offence for them to form, be linked to or assist in any way another company, within an allotted amount of time. In addition, it can also make them personally liable for company debts.

The director can also apply for a leave to act while disqualified, which means they still play a part in the management of the insolvent company despite being disqualified.

Contact DPP Business & Tax Solicitors

Our specialist business solicitors are well-versed in helping companies staying compliant in the eyes of the HMRC, as well as dealing with complex processes such as a director disqualification.

Get in touch with our expert team today and book a free consultation.

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