BRITAIN’S DODGY DIRECTORS
FIGURES REVEAL INCREASING NUMBERS OF COMPANY DIRECTORS ARE BEING PUNISHED FOR POOR BEHAVIOUR
THE number of directors being disqualified from their position is on the rise.
New figures from the Insolvency Service reveal 1,243 bad bosses were removed from their roles in 2018/19 - more than three a day on average.
The total number is up from 1,231 the year before and is at its highest since 2013/14.
Directors can be disqualified from their position if they have failed to fulfill
their duties and there are various behaviours that can lead to disqualification.
These include allowing a company to trade when it can’t pay its debts, failing to keep proper company account records, failing to send accounts and returns to Companies House, using company money for personal gain or failing to comply with statutory obligations.
In most cases the Secretary of State writes to a person they believe should be disqualified from their directorship. This gives the individual the chance to accept a voluntary disqualification instead of being issued formal legal proceedings. When this happens it is known as an “undertaking”. This was responsible for the majority of director disqualifications (1,027) last year. The remaining 216 were court ordered disqualifications.
The length of a disqualification varies. There were 727 people banned from being a director for between two to five years.
A further 91 were banned for more than five and up to 10 years, and the remaining 15 were disqualified for more than 10 and up to the maximum 15 years.
The average ban was five years. A disqualified director has restrictions imposed upon them.
These include being banned from taking up another UK-registered company directorship, being banned from sitting on a charity, school or police authority board, and not being allowed to be a registered social landlord.
Directors who breach any of these restrictions may be prosecuted.
There were 107 people who were taken to court in 2018/19 and 98 of them were convicted.
A total of 350 sentences were imposed - as more than one outcome can be given per charge or individual-including 64 prison sentences.
More than half of these sentences (34) saw a person spend less than a year behind bars, 12 were locked up for between one and two years, and 14 were sentenced to more than 24 months in prison.