Directors disqualification and restrictions

What am I not allowed to do?

It is a very serious matter if the court has made a disqualification order against you or you have given a disqualification undertaking to the department, which has been accepted. You could go to prison if you contravene the order or undertaking.

The order or undertaking will be registered at the Companies House which monitors new directorships and provides details of disqualified directors on request.

To understand exactly how the order or undertaking affects you, you should always ask your solicitor or an insolvency practitioner.

While the order or undertaking is in force, it stops you acting as if you were a director. So you cannot avoid the order or undertaking by simply changing your job description.

The order or undertaking also means that you must not get other people to manage a company under your instructions.

The order or undertaking does not stop you from having a job with a company, but unless you have court permission it does stop you:

• being a director of a company
• acting as receiver of a company's property
• being concerned in or taking part in the promotion, formation or management of a company
• and you must not act as an insolvency practitioner

The order or undertaking does not stop you carrying on business as a sole trader or in partnership with others but, unless you have court permission, you must not be a member of or be concerned or take part in the promotion, formation or management of a limited liability partnership.

What does 'company' mean?

You must not do any of the prohibited acts listed under the previous heading in relation to a company formed in Northern Ireland or in England and Wales, or in Scotland.

You must not do any of the prohibited acts in relation to a foreign company if:

• it is registered here
• it has a sufficient connection here (for example, if it carries on business or has assets here) even if it is not registered here

You must not do any of the prohibited acts in relation to a building society or an incorporated friendly society.

You must not hold various other offices, such as the trustee of a charity: always take professional advice first.

What happens if I contravene the order or undertaking?

You are then committing a criminal offence and you could go to prison for up to two years and face a fine.

If you contravene the order or undertaking, you could also become personally liable for any debts of the company which it incurs while you contravene the order or undertaking.

Anybody who acts on your instructions may also be personally liable.

Can I ask for permission to act in a way prohibited by the order or the undertaking?

You can ask the High Court for permission to become a director of a company or do anything else that the order or undertaking prevents.

However, the court cannot give you permission to act as an insolvency practitioner.

You need to satisfy the court that you have a reasonable need to do what you are asking - not just that you want to do it.

You also have to satisfy the court that, if it gives you the permission you want, the public will be adequately protected. The Court may require safeguards and may impose conditions on you.

If you want to ask for permission, you will need to make a formal application to the High Court under Article 21 of the Company Directors Disqualification (Northern Ireland) Order 2002.