Could you be disqualified from acting as a director?

If your Company went into administration or liquidation and you have acted properly the answer is no.

But the fact is that around 1,000 directors of Companies that go bust are disqualified each year. Very few of these directors set out to do wrong. Most misconduct is either inadvertent or done in an ill judged, well-meaning and desperate attempt to save the business. The main reasons why directors get disqualified are:

  • Trading to the detriment of the Crown and other creditors
  • Trading recklessly
  • Wrongful trading and trading whilst insolvent
  • Where there are unlawful dividends, preferences and transactions at undervalue

Where directors are disqualified the common theme is that they have allowed their Companies to carry on trading long after they should. Most directors are over optimistic and see the glass as half full where with the benefit of hindsight the Insolvency Service and the Courts tend to see the glass as half (or more) empty and that the directors have caused the Company's creditors unnecessary harm - and with that often comes personal liability too. However, you can reduce this risk effectively to zero. Over the years the Courts have repeatedly found directors who follow professional advice not guilty of misconduct which is where we come in. If you take and follow our advice you effectively shift the risk from the directors to us.

If your Company is struggling and you want to be sure that the directors conduct themselves properly and avoid personal liability then please do pick up the phone. We are happy to talk on a no names basis should you wish. For further information telephone 0800 331 7417.

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