A director disqualification is a statutory ban under the UK’s Company Directors Disqualification Act 1986 (CDDA). It prevents someone from acting as a company director and from any involvement in forming, promoting or managing a company. It does not stop them from earning a living or owning a business.
- A ban stops you forming, promoting or managing a company, but it does not prevent you earning a living, trading as a sole trader or owning shares.
- Everyday tasks like paying suppliers, negotiating with customers or hiring staff can count as management, even in an ordinary employee role.
- Using a spouse or nominee as a front director risks prosecution, and the nominee can become personally liable for the company's debts.
- Breaching a ban carries an unlimited fine, up to two years in prison, and possible compensation orders.
- Courts can grant permission to act, but only for a named company and often with conditions attached.
What director disqualification actually stops
Under section 1 of the CDDA, a disqualified person cannot act as a director of a UK company, or of any overseas company with a sufficiently close connection to the UK. A person who becomes disqualified has to resign from any existing directorships. The ban also covers acting as a receiver of a company’s property or as an insolvency practitioner, and a court cannot give permission for the latter.
Without express permission from a court, a disqualified person cannot be involved in forming or managing a company, and an employee can breach the ban as easily as a director can.
Promotion means raising capital before a company exists, whether meeting with investors or posting on social media. Formation covers the legal steps to incorporate a business at Companies House. Management is the day-to-day decision-making that steers the business.
A disqualification can also affect other roles a person can fill outside company management, such as sitting on the board of a housing association or certain health and social care bodies.
Holding charity trusteeships is possible with permission from the Charity Commission or the court, as is serving as a pension trustee with leave from the Pensions Regulator.
Who is disqualified from being a director?
Many bans come after a company becomes insolvent. Under section 6 of the CDDA, a director the court finds to have committed unfit conduct must be disqualified for at least two years. Unfit conduct might mean letting the company trade when it could not pay its debts, keeping poor accounting records, not filing accounts and returns, not paying tax, or using company money for personal benefit.
A Glasgow importing case shows how disqualification for unfit conduct can follow an insolvency investigation. The company brought in vapes labelled as medical nebulisers and told HMRC it owed no VAT on its sales. It also failed to submit any corporation tax returns. This left almost £15 million in VAT and customs duty unpaid, plus £437,101 in corporation tax. During the insolvency process, director Leanne Moynes failed to preserve accounting records despite the liquidator’s repeated requests. She and the other director both received nine-year bans.
Under section 8, a court can order a disqualification after the Insolvency Service investigates a person’s conduct, even if their company remains solvent. Persistent breaches of companies legislation and certain criminal convictions can also lead to a ban.
Section 11 automatically disqualifies undischarged bankrupts, and anyone under a bankruptcy restrictions order or undertaking, a debt relief restrictions order or undertaking, or a debt relief order moratorium.
Section 11A covers disqualification under international sanctions regimes. There a person can seek a licence from the Insolvency Service instead of applying to a court under section 17.
How long does a director disqualification last?
The length of disqualification depends on the grounds on which it is imposed. A person facing disqualification can contest the case in court, or where the legislation allows, offer a disqualification undertaking to the Secretary of State. (For companies wound up as promoters of tax avoidance schemes under section 8ZF, the individual gives this undertaking instead to HMRC.) An undertaking ends court proceedings and has the same legal effect as a disqualification order.
While the absolute ceiling for a ban is 15 years, different sections of the 1986 law carry different minimum and maximum terms. Disqualification under section 3 (persistent breaches of company legislation) and section 5 (certain summary convictions) can last for up to five years. Orders under sections 6, 8ZA and 8ZF have a two-year minimum. Undertakings under sections 7, 8ZC and 8ZF also have a two-year minimum.
Disqualification periods by statutory ground
The table below breaks down the primary statutory grounds:
| Statutory Ground (CDDA 1986) | Minimum Ban / Maximum Ban |
|---|---|
|
Section 2: Conviction of an indictable offence connected with a company |
No statutory minimum 5 years maximum (magistrates’ court) 15 years maximum (other courts) |
|
Section 3: Persistent breaches of companies legislation (e.g., repeatedly failing to file accounts) |
No statutory minimum 5 years maximum |
|
Section 5: Certain summary convictions for company law offences |
No statutory minimum 5 years maximum |
|
Section 6: Unfit conduct by a director of an insolvent company |
2 years minimum 15 years maximum |
|
Section 8: Unfit conduct discovered following a formal company investigation |
No statutory minimum 15 years maximum |
|
Sections 8ZA & 8ZC: Instructing or influencing an unfit director |
2 years minimum 15 years maximum |
|
Section 8ZF: Being a director of a company wound up as a promoter of tax avoidance schemes |
2 years minimum 15 years maximum |
The Insolvency Service’s Enforcement Outcomes for 2025/26 recorded 1,158 disqualifications under sections 2, 6, and 8, with a mean disqualification length of 8.1 years. Disqualifications that do not involve the Insolvency Service are excluded from this number.
A court-ordered disqualification normally takes effect 21 days after the order is made, unless the court sets a different date.
Doing a disqualified director search
Companies House maintains the public register of disqualified directors. Each entry gives the start date and duration of the ban, and any permission the court has granted for a particular company. The Insolvency Service separately publishes recent enforcement cases, with details of the conduct behind each ban.
People disqualified for undischarged bankruptcy and debt relief restrictions have to be checked on the bankruptcy and insolvency register instead. For sanctions-based bans, it is necessary to search the UK sanctions list.
Since 4 March 2024, section 159A of the Companies Act 2006 has made the appointment of a disqualified person as a director void. As a formation agent, Uniwide checks the public register before filing a director appointment.
Identity verification for directors is a separate corporate safeguard, and repeated failures can lead to disqualification under sections 3 or 5. New directors have had to verify their identity before appointment since 18 November 2025. Existing directors must do so alongside their next confirmation statement, within a 12-month transition period that ends in November 2026.
Shares are personal property, and the 1986 Act does not take them away. It also does not stop a banned director from buying more, or block them from receiving dividends from the shares they own.
A passive holder who receives accounts and takes a dividend is within the law. One who uses their votes, or the threat of them, to dictate commercial contracts or steer trading decisions is involved in management.
Under section 22(5), a shadow director is someone whose directions or instructions the directors are accustomed to following, and a disqualified director cannot act as one. The law provides an exception for advice given purely in a professional capacity.
Can a disqualified director work for a company?
A disqualified director can work as an employee, even for a company they used to run.
Some commonplace duties as an employee can amount to taking part in the management of the company, and are banned for a disqualified director. The Insolvency Service’s guidance gives examples that may count: ordering from or paying suppliers, negotiating with customers, dealing with the company’s bank account, and hiring or firing staff.
These activities can constitute management even if the person is an employee rather than an appointed director.
| Generally permitted | Likely to amount to management |
|---|---|
|
Carrying out defined technical work without authority to make management decisions. |
Instructing a spouse, relative or other nominee who is the appointed director. |
|
Preparing invoices to bill customers where the underlying transaction has been authorised by someone else. |
Ordering from or paying suppliers. Negotiating with customers. |
|
Routine administrative support. |
Hiring or firing employees. |
|
Passive shareholding and receiving dividends. |
Setting company policy or deciding which creditors are paid. |
Can a disqualified director be a company secretary?
Government guidance says a disqualification order does not of itself prevent someone from being a company secretary. As with employment, the specific duties the disqualified director performs are what determine the legality of the position. Routine administrative tasks such as filing statutory documents and minute-taking are allowed. Directing trading operations or managing corporate funds breaches a ban.
Can a disqualified director work as a management consultant?
The Insolvency Service guidance highlights “acting as a management consultant” as an example of activity that could amount to taking part in management, depending on what the consultant does.
Bharat Jogia, in the West Midlands, ran two pharmaceutical companies while serving a 13-year ban. The Insolvency Service found he instructed solicitors, approved accounts, managed staff, and received more than £80,000 in consultancy fees. His wife was director of one of the two companies, BHJ Consulting Ltd. Both received fresh ten-year disqualifications and suspended prison sentences.
Can a disqualified director be a sole trader or LLP member?
Disqualification rules also extend to limited liability partnerships (LLPs), so without court permission a disqualified person cannot be a member of or take part in promoting, forming or managing one.
Sole traders lack a corporate structure, and with no company to form, promote, or manage, a disqualified individual can generally trade in their own name.
An ordinary partnership is also possible for a disqualified director, provided it is not a device for getting around the ban. A sole trader takes on unlimited personal liability for all business debts.
Can a disqualified director be a PSC or use a nominee?
A disqualified individual can appear on the People with Significant Control (PSC) register if they hold more than 25 per cent of a company’s shares or voting rights.
Placing a spouse, sibling, or employee on the appointment form while directing the company from behind the scenes can amount to taking part in management.
This arrangement also exposes the appointed director to personal liability. Under section 15(1)(b) of the CDDA, someone involved in managing a company can be personally liable alongside the company. This applies if they act on the instructions of a person they know to be disqualified or an undischarged bankrupt. Liability covers debts incurred during that period, unless the necessary permission was obtained.
Section 15(5) provides that, once a person has acted on such instructions, they are presumed to be willing to continue doing so unless they show evidence to the contrary.
Acting as a director whilst disqualified
Breaching a disqualification order is a criminal offence under section 13 of the CDDA, punishable by an unlimited fine, up to two years in prison, or both. Taking part in management while disqualified can constitute a breach.
A person who contravenes a disqualification can become civilly liable for debts incurred while the disqualification is contravened.
Compensation orders address the situation when the misconduct behind a disqualification causes a direct loss to creditors. The disqualified director can be ordered to contribute personally towards the loss (CDDA, s15A). The regime covers relevant misconduct on or after 1 October 2015.
Can a disqualified director get permission to act?
Under section 17 of the CDDA, a disqualified person can ask a court for permission to act as a director or take part in the promotion, formation, or management of a named company. The court considers whether there is a reasonable need for the applicant’s involvement and whether the public will be adequately protected.
Permission can come with conditions, and it only covers the named company.
Upcoming changes to the law
The government’s Corporate Civil Enforcement Reforms consultation, published on 25 March 2026 and closed on 22 June 2026, put forward eleven measures.
The “significant structural changes” in these proposed measures include a new “director restrictions” regime for less serious misconduct, automatic disqualification following a public interest winding-up, and moving disqualification decisions from the courts to the Secretary of State, with an appeal route to a tribunal.
Other proposals would strengthen powers to recover money companies paid out in ways that undermine fairness in insolvency, and let a court disqualify a director after a summary conviction for violating HMRC securities legislation.
None of these proposals are current UK law yet.
What should you do in dealing with a disqualified director?
If you are thinking of employing, appointing or doing business with someone who is or may be disqualified, check the Companies House register first.
If you are serving a ban, you should seek independent legal advice before accepting any employment, shareholding, or consultancy role connected to a limited company.
Tags: Company Secretary, Directors
