Effect of abusing a Disqualification Order - Imprisonment - Personal Liability - Future employment by a limited company?
One effect of a disqualification order under The Company Directors Disqualification Act 1986 is that that individual who is made subject to a disqualification order cannot be a registered director of a limited company for the period of the disqualification order (or disqualification undertaking).
Another effect is that neither can that person act as a de facto director or as a shadow director.
Please click here for a definition of a de-facto director.
Please click here for a definition of a shadow director.
If the disqualified individual gets involved with a company after the disqualification order and acts as if he were a director then the following severe penalties may follow:
On conviction, the "director" could be imprisoned for not more than two years or be fined (or both). (Crown Court)
The "director" may be personally liable for the company's debts.
A disqualification order is not intended to deprive a person from earning a living. In Purnells experience through contact with the Insolvency Service and by providing them with full written information a disqualified person can work for a limited company during the period of disqualification. The person must have a job description that ensures that in reality that individual is not involved in financial matters.
Summary - Effect of Company Directors Disqualification Order
Any failure to accept the spirit and the wording of a disqualification order can result in imprisonment and personal liability for the debts of the company with which the disqualified director became involved after disqualification.