Can I act as a company director whilst disqualified?
- Director Disqualification
What will happen if somebody finds out that I have been running a company whilst disqualified?
From time to time, my colleagues in our specialist director disqualification department will receive a new enquiry and the prospective client will ask:
“What would happen to me if the Secretary of State found out that I was running a company whilst disqualified?”
Sometimes the question is phrased as though the caller is asking on behalf of a friend.
On 20 June 2019 it was reported that Andrew Brian had received a 12-month suspended prison sentence, 150 hours of unpaid work and £2,500 contribution to costs after pleading guilty to running a company in breach of a directorship disqualification. Thomas Brian (his son) and Stephen O’Connor have also received community orders for aiding and abetting Andrew Brian. All three men appeared for sentence at Bradford Crown Court on 23 May 2019.
The Insolvency Service, a Government department, led an investigation into the affairs of a Company called MET Euro Ltd and it found:
- The Company owed more than £255,000 and faced legal action from creditors left waiting for payment in 2014.
- Stephen O’Connor and Thomas Brian were the registered directors but Andrew Brian acted as the de facto director, controlling the Company on a day to day basis.
- Registering other directors helped Andrew Brian get round a 6-year disqualification undertaking he had voluntarily signed in February 2009 – this was issued due to his previous Company owing a large amount of tax.
- Andrew Brian and his family substantially benefited from MET Euros – accounts – payments were made to a joint mortgage account under Andrew Brian and his wife.
- Andrew Brian signed a disqualification undertaking for 12 years, whilst Thomas Brian and Stephen O’Connor each provided 5-year disqualification undertakings for their respective misconduct.
It should be noted that this is not an isolated case and the Law Reports are full of similar such cases. Our advice at Summit Law LLP is to instruct a firm that specialises in director disqualification work, like ourselves, and then see if it is possible to make an application for permission to continue acting as a director, even whilst disqualified. Such applications have to be thought out carefully but orders can be made which means that directors do not have to run the risk of being caught!