How to choose the best director disqualification solicitors
- Director Disqualification
When you’re dealing with director disqualification, it’s important to use a solicitor who specialises in the subject. Don’t try to do it yourself, or things could go even more horribly wrong.
But how do you decide which are the best director disqualification solicitors to appoint?
This article explores some of the things you should consider before you choose.
Whose side is the liquidator on?
The report that led to the disqualification proceedings may well have come from the liquidator. But it’s important to remember that the liquidator doesn’t act for the directors.
While investigating the affairs of the company, the liquidator is under a statutory duty to lodge a report of their findings with the Secretary of State.
Not every firm of solicitors specialises in director disqualification. So it’s wise to discover whether they have ever worked in the Director Disqualification Unit and/or with specialist counsel.
In case you’re wondering, yes, we tick both those boxes here at Summit Law LLP.
Here are a couple of ideas that would only be possible when you work with solicitors who are director disqualification experts:
- Retirement as an option
If a director is on the verge of retirement, and there are no other reasons for fighting the Secretary of State, we would usually ask the director whether they really need to continue in that role. If the director agrees to retire, it’s important to ensure that they do not retain an interest in the company management, either directly or indirectly.
- Restructure as an option
Would it be possible to restructure the company, perhaps by selling it to a third party or family member?
Undertakings are a relatively new phenomenon and were introduced in April 2001. Under the Company Director Disqualification Act 1986. a person can give an undertaking meaning that he/she:
(i) will not be a director of a company, act as a receiver of a company’s property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has permission of the court, and
(ii) will not act as an insolvency practitioner.
It is common for director disqualification undertakings to only be available where director disqualification proceedings are proposed following the insolvency of a company.
The maximum period which a person can be disqualified for by way of a director disqualification undertaking is 15 years. The minimum period is two years.
It’s important not to breach any undertakings as there are serious repercussions.
As with any business issue, you should do some due diligence. Find out which clients the solicitor has acted for before. Ask for evidence to prove the success that the solicitor claims.
We’ve dealt with director disqualification for decades, and have almost endless case studies and testimonials to share.
For example, it’s expensive to take on the Government (as you can no doubt imagine). However, when it is of paramount importance (such as a director of a blue-chip with corporate clients), we have successfully managed to persuade the Secretary of State to withdraw court proceedings against our client. We have also assisted clients to make an application for permission to continue acting as a director, despite the disqualification undertaking.
It may not sound very scientific, but don’t be afraid to use your gut instinct. Before you instruct a solicitor, it’s reasonable and sensible to ask yourself whether you actually trust them to resolve your case.
If you’d like more information on director disqualification, call us on 020 7467 3980. You can also read our detailed director disqualification guide.