Director disqualification and misconduct

Avoid misconduct proceedings and disqualification…

Careless, deceitful, and delinquent company directors can expect to face disqualification proceedings if their actions cause creditors to suffer financial loss.

Disgruntled shareholders and creditors (the people and businesses you owe) may take action against a director suspected of misfeasance or another serious transgression. However, a licensed insolvency practitioner (IP) usually instigates Director Disqualification Proceedings.

Insolvency practitioners (IPs) play an integral role in business rescue and company winding-up procedures such as administration, CVA, and liquidation. As a result, it’s essential for the owners and directors of struggling companies to know and understand three things: 

  1. IPs and lawyers earn by monetising the assets of insolvent companies (and their directors if necessary)
  2. IPs are licensed and regulated to protect creditors’ rights in administration and liquidation procedures
  3. Any IP you hire for a statutory insolvency procedure must prioritise creditors’ rights and interests over yours

Prepare for misconduct and Director Disqualification Proceedings

An IP is appointed whenever a company enters administration or liquidation. They must send a report on the directors’ conduct to the Government agency responsible for “…tackling financial wrongdoing and maximising returns to creditors.”

The Insolvency Service may investigate any of the company’s registered, former, shadow, or de facto directors if the IP’s report highlights improper conduct or mismanagement.

Four months ago, the agency launched a campaign targeting directors who used false information, and abandoned or dissolved limited companies following receipt of a Bounce Back Loan (BBL).

Is your business struggling with BBL or Coronavirus Business Interruption (CBILS) repayments? Or have you recently been:

  • Accused of misconduct?
  • Notified of disqualification proceedings?

If “Yes” is your answer to either question, it’s essential that you seek advice from an independent professional before proceeding. A director accused of wrongdoing could receive a criminal prosecution, and a ban from managing companies for up to 15 years. Contact us today on 020 7504 1300 for a FREE and confidential consultation.

de trafford

De Trafford Third Party Recovery: An Update

29/02/2024

The recent financial collapse of multiple DeTrafford property development companies hassignificantly impacted purchasers. As they navigate the consequences, a glimmer of hope arises asthe wheels…

Read More
Northumberland Living

Northumberland Living Developments: Allegations and Challenges

22/02/2024

Northumberland Living, In West Chevington Farm, Druridge Bay, is a development poised for completion. Only to be stalled by an apparent unforeseen historical conveyancing issue.…

Read More
st anne's limited development

St Anne’s Street Limited: The Perils of Off-Plan Property Purchases

15/02/2024

Two luxury housing developments in Liverpool have faced major setbacks, leaving purchasers indespair and dreams of new homes shattered. St Anne’s Street Limited and Chaloner…

Read More

County Court Judgements- What are they?

19/12/2023

Dealing with unpaid debts is never a pleasant situation, but sometimes it becomes necessary to seek recourse to resolve these matters. One such avenue available…

Read More