Any directors found to be delinquent could very well be disqualified as a company director for up to 15 years. During this time, it would be illegal for the disqualified director to take part in the formation, promotion or management of a limited company.
A number of factors can lead to directors being disqualified. For example, a director who continues to take deposits from customers knowing that they will not receive the products or services that they are paying for could find himself facing director disqualification.
When a company has lots of debt, the director may find it difficult to pay HM Revenue & Customs. This is a clear sign that the director needs to seek competent advice regarding the options available to him.
Often directors that use company money or assets for their own benefit rather than for the benefit of the company itself may find that they are facing disqualification.
The process for being banned as a director starts with an investigation into the company, following which the director is given an opportunity to explain the findings. If a reasonable explanation is not forthcoming or the director has broken any laws, then they may find themself facing disqualification.
Directors can be banned by court order, or in order to save costs and time may voluntarily choose to accept a director’s disqualification.
Once you have been officially banned as a director, you will need to be careful, as failure to comply with the terms of your disqualification could see you go to jail for up to two years. Restrictions won’t only be limited to just working as a company director! You’ll also face bans from being a pension trustee and working as either a solicitor or accountant to name but a few.
Get in contact with RG Insolvency today and we can help you learn more about the best practices you need to follow as a company director. We also offer impartial advice for a number of insolvency procedures, based upon years of proven industry experience.