Director disqualification: the common grounds
Since 2021 the Insolvency Service can investigate and disqualify directors even of companies that have been dissolved. A voluntary strike off is no longer a way to avoid scrutiny of a director's conduct before the company failed. Insolvency Service enforcement outcomes; Companies House register
| Common reason | What it involves |
|---|---|
| Bounce Back Loan misuse | Taking or spending loan money improperly |
| Unfair treatment of creditors | Preferring some creditors, including connected parties |
| Failure to keep or deliver records | Inadequate accounting records |
| Unpaid taxes | Trading to the detriment of HMRC |
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Disqualification turns on how a director behaved, not simply on the company failing. What usually matters is whether you kept trading when you knew the company could not pay its debts, and whether creditors were treated fairly, so a record of the decisions you make now is the simplest protection.
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General information, not advice about your company.
Methodology and source
This page combines Insolvency Service enforcement outcomes with the Companies House disqualified directors register to set out the most common grounds for director disqualification. It does not reproduce disqualification counts; see the Insolvency Service enforcement outcomes (linked above) for the latest published numbers. The 2021 reforms allow investigation of directors of dissolved companies, which is why a strike off is not a way to avoid scrutiny. Acting honestly and taking advice early is the best protection against personal liability.
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