Director disqualification is a serious penalty imposed by the court or accepted through an undertaking. A disqualified person cannot act as a director of any company, be involved in company formation or management, or act as an insolvency practitioner for the duration of the disqualification period (typically 2 to 15 years).
The most common grounds for disqualification are unfit conduct in connection with company insolvency, persistent failure to file documents with Companies House, fraud, and wrongful or fraudulent trading. The Insolvency Service investigates directors of insolvent companies and can seek disqualification orders.
Breaching a disqualification order is a criminal offence punishable by up to 2 years imprisonment and/or unlimited fine. The director also becomes personally liable for the debts of any company in which they are involved.
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