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Information on the disqualified directors register

The disqualified directors register?

Updated August 2016.

The disqualified directors register is for people who were directors of Limited Companies or members or LLP`s and who have been disqualified either via a court order or by going through the insolvency service. The register will show the Companies Directors Disqualification Act 1986 (CDDA), which the director would have been disqualified under.

How does directors disqualification work?

Many people believe that if your company goes into liquidation then the director(s) will automatically be disqualified. This is not true, unless the circumstances show that you were committing fraud or were acting wrongly in your role in the eyes of the law. Companies can go into liquidation for all sorts of reasons, but it does not mean that the company director will then be disqualified and have to go onto the disqualified directors register.

Having a company going into liquidation does not prevent you from taking on another directorship or starting another limited company. There is no assumption of wrongdoing or wrongful trading.

The whole point of the Companies Directors Disqualification Act 1986, is to keep a register of those directors who were found to be ‘unfit’ for the role and effectively ban them from becoming directors of a limited liability company in the future. Being added to the register is the last resort, and the step is only taken when that person has been proven to have acted fraudulently, wrongfully or conducted themselves very badly in the role. It is up to the government to prove this before any action can be taken to ban a director and add their name to the register.

In 2015, the Small Business, Enterprise and Employment Act introduced additional measures to ban directors who have run insolvent businesses fraudulently in the past or have badly influenced other directors in their roles. Company directors can also now be disqualified and put on the register if they are involved in company offences overseas. The new amendments now give a court more time (an increase of a year) to review evidence that may take longer to obtain and study.

What is classed as unfit behaviour?

Here is a list of the main points that the Department of Business Innovation and Skills (DeBIS) seeks to ban directors on:

Failure to submit annual accounts to Companies House on time
Failure to submit annual returns to Companies House on time
Excessive salaries or drawings when the company was plainly insolvent
Trading on when he or she knew the company was insolvent (also known as trading whilst knowingly insolvent)
Continuing to take credit when there was “no reasonable prospect” of creditors being paid
Misrepresentation of the facts about the company
Failure to respond or comply with a liquidator’s requests

It is still reassuring to know that in the UK director’s disqualifications are still pretty rare. Up to 2015 there were only around 1,000 to 1,500 disqualifications each year on average. The public are able to report directors that they suspect of wrong doing or fraud to either the Insolvency Service, Companies House or the Serious Fraud Office. There is an online government advice page here.

It is important to remember that a CDDA only applies where the company has gone into liquidation; it does not apply in a Company Voluntary Arrangement (CVA).

What happens after you are banned as a director?

When disqualified and placed on the disqualified directors register, you may not take on a role as a director or manager during your disqualification period. Doing so is considered a criminal offence.

Should you become a director or manager while disqualified, you may find yourself landed with a prison conviction for up to 2 years or a hefty fine – or even both! Not only this, but you could become personally liable for all the debts carried by the company.

On a side note – even a manager or director who acts under the instruction of a disqualified director can find themselves personally liable for company debts – so take care not to be working under the influence of a disqualified director!

 Why is there a disqualified directors register kept by Companies House?

Under Section 18 of the Company Directors Disqualification Act 1986, the Secretary of State must legally maintain a register. Companies House carries out this function under this act.

Am I able to receive a copy of the disqualification order?

You are unable to obtain a copy of the disqualification order from Companies House. Court officials obtain your information from the order to help complete the form, they will then notify Companies House with the correct information regarding the disqualification.

How can I see the disqualified directors register?

You can view the Disqualified Directors register here. There is no cost to search the database.

The person I am looking for is not on the register?

If the person you are searching for is not on the register this would probably mean that the person either has not been disqualified or that the person was disqualified and the order has lapsed, which means it would have been deleted from this register. Lastly the person could have recently been disqualified but has yet to go on the register.

Can I act as a secretary even though I have been disqualified?

Someone who has been disqualified is able to act as a secretary, the act does prevent them from being company directors or LLP members but it does not apply to company secretaries.

I was made bankrupt, does this apply to me?

If you were made bankrupts then yes it does apply to you, if the bankruptcy is still in force, you cannot be a director of a Limited company or LLP member. The register for people who are bankrupt can be found here.

If you were made bankrupt in Scotland, they will not show on the insolvency website. You will need to view the Accountancy in Bankruptcy website.

Your Virtual Office London provides expert advice on Company Formations, Accountancy and Virtual Office Services including registered office address. If you need to speak to anyone, do contact us today, we are always happy to help.

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