Being a director of a company that becomes insolvent doesn’t automatically disqualify you from future directorships. However, the consequences depend on how the Insolvency Service assess your actions during your role as a director.
Here’s what they will consider:
- Your Duty of Care: Did you act with competence and diligence?
- Minimising Losses: Did you take all reasonable steps to minimise losses for creditors?
- Compliance: Did you adhere to legal and regulatory requirements?
If the Insolvency Service finds you breached your director’s duties, they may restrict your ability to hold directorships for a period ranging from a few years to a lifetime ban.
Seeking Professional Advice is Key
If your company faces insolvency, seeking professional advice from an insolvency practitioner is crucial. The priorities of a director should change when they recognise that a business is in trouble to place the needs to creditors higher than those of shareholders. It can be confusing. An insolvency practitioner can guide you through the process, explore options to potentially save the company, and minimize the risk of disqualification.
We Can Help
Our team of insolvency practitioners can advise you on your director’s duties and the potential consequences of insolvency. Contact us today on 0161 474 0920 for a confidential discussion.
