Being disqualified as a company director can be a daunting experience, but there are options to challenge or even change the decision. Whether you wish to appeal the ban, reduce its duration, or obtain permission to act as a director despite the disqualification, understanding your options is crucial. Here’s a guide to navigating the process and taking steps toward reinstatement.
Understanding Director Disqualification
Director disqualification is essentially there to safeguard the public interest and deter any misconduct. Common reasons for bans include:
- Allowing a company to trade while insolvent.
- Failing to file company accounts.
- Engaging in fraudulent or negligent practices.
A ban prohibits you from managing or directing a company for a specified period (typically between 2 and 15 years). However, depending on the circumstances, you may be able to appeal, reduce the disqualification period, or obtain permission to act as a director.
Appealing a Director Ban
If you believe your disqualification was unjustified, you can appeal the decision. However, appeals must be based on strong grounds, such as:
- Procedural Errors: The disqualification process was not followed correctly.
- New Evidence: Significant evidence has emerged that was not available earlier.
- Unfair or Incorrect Decision: Misinterpretation or misrepresentation of facts during the original proceedings.
Steps to Appeal
- Seek Legal Advice
Consult a professional expert on director disqualification to assess the strength of your case and guide you through the process. - File an Application
Submit an application to the court that issued the disqualification order, outlining your grounds for appeal and supporting evidence. - Prepare for the Hearing
Present your case in court, demonstrating why the ban should be overturned or modified. - Await the Court’s Decision
The court may choose to lift the ban, reduce its duration, or uphold the original decision.
Reducing a Director Disqualification Period
If you voluntarily agreed to a director disqualification undertaking, you may apply to reduce the disqualification period under Section 8A of the Company Directors Disqualification Act 1986. However, it is worth noting that this option is not available if you defended disqualification proceedings in court.
Grounds for Reducing Disqualification
The court may agree to reduce the period of disqualification if:
- Consent Issues: You did not truly consent to the undertaking due to duress or undue influence.
- New Evidence: Information that alters the original decision has come to light.
- Errors or Misjudgement: Mistakes were made during the disqualification process.
- Unfair Duration: The length of the disqualification is unduly harsh or oppressive.
This application requires strong evidence and a clear rationale for why the period should be shortened.
Obtaining Permission to Act as a Director
If an appeal or reduction is not feasible, you can apply for permission to act as a director despite being disqualified. This process, governed by Section 17 of the Company Directors Disqualification Act 1986, involves demonstrating to the court that safeguards are in place to prevent past mistakes from recurring.
Why the Court May Grant Permission
Remember – the courts are not looking to punish directors, but to protect the public from what went wrong before, happening again. They may grant permission for you to resume acting as a director if you:
- Show that sufficient safeguards are in place to prevent future misconduct.
- Prove that allowing you to act as a director will not endanger the public.
- Demonstrate rehabilitation, such as implementing better business practices or completing relevant training.
Key Considerations for Any Application
- Act Promptly: Appeals and applications must be made within specified timeframes.
- Seek Professional Guidance: Engaging an expert will significantly improve your chances of success.
- Provide Strong Evidence: Whether appealing, reducing, or requesting permission, ensure your application is well-supported with relevant documentation.
While director disqualification is serious, it is not always permanent. Whether through appealing the decision, reducing the ban period, or securing permission to act as a director, there are ways to rebuild your professional standing. The process requires preparation, determination, and expert guidance, but with the right approach, you can navigate these challenges and move forward.
It is worth noting that if you’ve been disqualified as a director in the UK, you have 28 days from the date of the disqualification order or undertaking to file an appeal. Acting quickly is essential, as appeals made after this period may not be accepted. If you’re considering your options, reach out to our team who handle all matters relating to directors disqualification, now at info@iladvisory.com.