Director disqualification and the disqualified directors register

A disqualified director is a person the law forbids from acting as a company director, or from taking part in forming, promoting or managing a company, for a fixed period, unless a court gives permission. The rules are in the Company Directors Disqualification Act 1986. A disqualification is a matter of public record, and it is one of the first things to check.

Orders and undertakings

A disqualification comes about in one of two ways.

• A disqualification order is made by a court, usually on an application by the Secretary of State after the Insolvency Service has investigated.
• A disqualification undertaking is given by the person to the Secretary of State instead of going to court. It has the same legal effect as an order. Most disqualifications are undertakings.

The period is up to fifteen years, and at least two where the ground is unfitness. For unfitness, the Insolvency Service and the courts treat the range in three bands: the lower band of two to five years for less serious conduct, the middle band of six to ten, and the top band of eleven to fifteen for the most serious cases.

The usual grounds

• Unfit conduct as a director of a company that became insolvent. This is by far the most common route. When a company enters liquidation or administration, the insolvency practitioner reports to the Insolvency Service on the directors’ conduct, and the Service decides whether to seek a disqualification. Typical findings are trading at the expense of creditors, failing to pay tax while paying others, not keeping proper records, or moving assets out of the company before it failed.
• Persistent breaches of companies legislation, such as repeatedly failing to file accounts and returns.
• Conviction of an indictable offence connected with running a company, or a finding of fraud in a winding up.
• Breaches of competition law, where the person was a director of a company that infringed it and the person’s conduct makes them unfit.

Separately, a person who is an undischarged bankrupt, or subject to a debt relief order or a bankruptcy restrictions order, may not act as a director without the court’s permission. Those restrictions appear on the Individual Insolvency Register rather than the register of disqualified directors. A Check the Director report searches that register too, under every name the person has used at Companies House, and shows each entry with how its date of birth compares.

How to search the disqualified directors register

Companies House keeps the register of disqualified directors and publishes it on the same service as the company register, where it can be searched without an account. Search for the person’s name and choose “Disqualified officers”. The register holds disqualifications from the courts and the Insolvency Service, and also those from the Competition and Markets Authority, the Foreign, Commonwealth and Development Office, and HM Treasury through the Office of Financial Sanctions Implementation. An entry shows the person’s name, month and year of birth and address as recorded; the date the disqualification started and ends; the section of the Act it was made under; the company or companies the conduct concerned; and whether it was an order or an undertaking. Where a court has given the person permission to act as a director of a particular company despite the disqualification, the entry lists that company, and it says how many disqualifications the person has had.

A search goes further with a few habits:

• Search every name the person has used. The register is searched by name, and an entry carries the name the disqualification was recorded under: a middle name, a former surname or a different spelling can keep it out of a search on the name you were given.
• Use the month and year of birth. Where an entry shows them, they tell two people with the same name apart, as they do on the company register.
• Look beyond the register for the most recent and the Northern Irish. For a disqualification under the 1986 Act made in the last three months in England, Scotland or Wales, GOV.UK points to the Insolvency Service’s own online service; for one made in Northern Ireland, to the Insolvency Service in Northern Ireland.
• Check the other registers. A bankruptcy or a debt relief order bars a person from acting as a director without putting them on this register (see above), and a disqualification under sanctions legislation is on the UK Sanctions List.

The Insolvency Service publishes a short account of the unfit conduct behind each disqualification it obtains. Entries are removed from the register when the period ends, so a search only ever shows disqualifications that are current.

What an entry does and does not tell you

• It tells you that a court made an order, or that the person gave an undertaking, and for how long. An undertaking is not an admission of every allegation, but it is accepted on the basis of a schedule of unfit conduct that the person does not dispute for this purpose.
• It does not tell you about disqualifications that have expired. A person whose five-year disqualification ended last year appears on no register, though the company records that led to it are still there.
• Acting while disqualified is a criminal offence, and a person who does so becomes personally liable for the debts the company ran up while they were involved.

In a report

A Check the Director report checks the register of disqualified directors for every officer record the client confirms. A current entry meets criterion F01, “Disqualification on the register”, and the report shows the entry with its period, the section of the Act and the companies named, cited to the register. It states the fact of the entry and nothing more; the report makes no judgement of the person. The twenty-eight criteria are published in full.

This guide describes the public record in general terms, for England and Wales unless it says otherwise. It is not legal advice.