July 2009 - Record numbers of company directors disqualified

Figures from the Insolvency Service show that during the 2008-9 financial year, a total of 1,252 directors were disqualified. The mean length of disqualification has also risen by 12% to 6.5 years.

Company directors may be disqualified for various misconduct issues, including fraud or theft in the run up to a business becoming insolvent, but a ban can also come into force if directors fail to keep a correct accounting record or fail to file accounts on time.

Disqualified directors can also be sent to prison for up to two years if they do not pay the Business, Enterprise and Regulatory Reform (BERR) for the costs incurred in bringing the disqualification proceedings.

These figures follow new penalties introduced in February which mean businesses face higher penalties for late filing of accounts.

Individuals who have been disqualified can still go into business, but only as a sole trader, which exposes them to unlimited liability for the losses of that business.

If you would like to discuss company director disqualification with us, please call 01562 514 862, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or contact us using the contacts page of our website.