Overview

In recent years, there has been an increase in the number of company directors being prosecuted for failing to comply with their obligations concerning their companies.

Company directors are obliged to file a variety of documents, including annual accounts and annual returns at Companies House. If these documents are not filed on time, then each of the company’s directors may be prosecuted by Companies House and punished by way of a financial penalty for the failure itself. Together with a daily penalty for each day that the documentation remains outstanding, following conviction. This is in addition to the late payment penalty that may be levied against the company.

In the case of repeat offenders, the court can order that directors be disqualified for up to five years.

Regulation of Companies
 

We have represented company directors in numerous proceedings, brought by Companies House. Those proceedings are usually commenced in Cardiff Magistrates’ Court, meaning that we are conveniently located to conduct these proceedings on your behalf; located in the city centre of Cardiff. In some cases, we may be able to act under fixed fees.

There are very limited defences available to company directors in these circumstances. If you have received notification from Companies House that you are to be prosecuted, it is important that you seek legal advice as soon as possible to ensure that any defence to the proceedings may be explored as soon as possible.

We can enter into correspondence with Companies House on your behalf. In some cases, we have been able to negotiate with Companies House so as to either avoid proceedings being commenced or having those proceedings discontinued, by agreeing a course of action to ensure compliance.

Directors’ disqualification
 

In some circumstances, individuals may be disqualified from acting as a company director by an order made in the criminal courts. This could be following conviction for an offence which calls into question their fitness to act in that capacity.

More commonly, however, company directors may face disqualification proceedings following an investigation into the company’s affairs by the Insolvency Service (part of the Department for Business, Energy & Industrial Strategy). That investigation may follow the company being placed into voluntary liquidation or into receivership. Following that investigation, the Enforcement Directorate of the Insolvency Service may determine that it is in the public’s interest to take steps to curtail an individual’s capacity to be involved with any other company.

Proceedings taken by the Insolvency Service are civil in nature, and usually heard by the Chancery Division of the High Court. The Service will seek a Disqualification Order, which can prevent the person named in the Order from being a director of a company. In some cases, it can prevent a person being concerned, either directly or indirectly, in the promotion, formation or management of a company. Such orders can be for a period of between two and fifteen years, and a breach of a Disqualification Order is a criminal offence, punishable by up to two years in prison, or an unlimited fine.

How can we help?
 

If you are facing the prospect of disqualification proceedings, then you should seek advice as soon as possible. We may be able to enter into negotiations with the Insolvency Service, by way of written submissions that a Disqualification Order is unnecessary. If that is not feasible, due to the case circumstances, then it may be possible to negotiate a period of disqualification, that is the minimum necessary. We are also able to act in the substantive proceedings, ensuring that your interests are protected at each stage.

In some cases, depending on merit, we may be able to make an application to the Court for permission for a disqualified director to be involved in the running of a particular company.

For further information on any of the topics on this page or to get some advice, please contact us.

We have represented company directors in numerous proceedings, brought by Companies House. Those proceedings are usually commenced in Cardiff Magistrates’ Court, meaning that we are conveniently located to conduct these proceedings on your behalf; located in the city centre of Cardiff. In some cases, we may be able to act under fixed fees.

There are very limited defences available to company directors in these circumstances. If you have received notification from Companies House that you are to be prosecuted, it is important that you seek legal advice as soon as possible to ensure that any defence to the proceedings may be explored as soon as possible.

We can enter into correspondence with Companies House on your behalf. In some cases, we have been able to negotiate with Companies House so as to either avoid proceedings being commenced or having those proceedings discontinued, by agreeing a course of action to ensure compliance.

In some circumstances, individuals may be disqualified from acting as a company director by an order made in the criminal courts. This could be following conviction for an offence which calls into question their fitness to act in that capacity.

More commonly, however, company directors may face disqualification proceedings following an investigation into the company’s affairs by the Insolvency Service (part of the Department for Business, Energy & Industrial Strategy). That investigation may follow the company being placed into voluntary liquidation or into receivership. Following that investigation, the Enforcement Directorate of the Insolvency Service may determine that it is in the public’s interest to take steps to curtail an individual’s capacity to be involved with any other company.

Proceedings taken by the Insolvency Service are civil in nature, and usually heard by the Chancery Division of the High Court. The Service will seek a Disqualification Order, which can prevent the person named in the Order from being a director of a company. In some cases, it can prevent a person being concerned, either directly or indirectly, in the promotion, formation or management of a company. Such orders can be for a period of between two and fifteen years, and a breach of a Disqualification Order is a criminal offence, punishable by up to two years in prison, or an unlimited fine.

If you are facing the prospect of disqualification proceedings, then you should seek advice as soon as possible. We may be able to enter into negotiations with the Insolvency Service, by way of written submissions that a Disqualification Order is unnecessary. If that is not feasible, due to the case circumstances, then it may be possible to negotiate a period of disqualification, that is the minimum necessary. We are also able to act in the substantive proceedings, ensuring that your interests are protected at each stage.

In some cases, depending on merit, we may be able to make an application to the Court for permission for a disqualified director to be involved in the running of a particular company.

For further information on any of the topics on this page or to get some advice, please contact us.

Key contact

As the Head of the Regulatory Department, Martin acts in a wide-range of regulatory crime and professional regulation matters. Martin has built up over 20 years of experience and a wealth of specialist knowledge.

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