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.