Lefteris Kallou
June 2025

Fancy having your name proudly listed on the Companies House Register of Disqualified Directors? No? Didn’t think so.

But if, hypothetically, you did want to ruin your entrepreneurial reputation, be barred from running a business, and have your conduct investigated by the Insolvency Service, then you’re in luck – we’ve got the perfect guide to getting disqualified as a company director. Be aware: it’s not glamorous, it’s not clever, and it could leave you out of business (and pocket) for up to 15 years.

What Is Director Disqualification?

Director disqualification is a legal order made under the Company Directors Disqualification Act 1986 that bars individuals from acting as a company director or even being involved in managing a company, for a set number of years. You don’t have to hold the title of “Director” for it to apply, either. If you’re effectively acting as one, you’re fair game.

The Insolvency Service, usually tipped off by insolvency practitioners, take the lead in investigating misconduct and seeking disqualification orders or voluntary undertakings – their outcomes report noted that in 2024-25 a whopping 1036 directors were disqualified (736 being from Covid Loan abuse).

This report serves as the inspiration for this article;  it’s not actually about how to get yourself banned from boardrooms, it’s about how to avoid it. Because knowing what not to do as a director is just as important as knowing what to do. And if you’re a founder, entrepreneur or startup director, understanding these pitfalls could save your business… and your reputation.

8 Fast-Track Ways to Ruin Your Boardroom Career

If you’re looking for a masterclass in what not to do, here are some sure-fire ways to end up disqualified:

1. Bounce Back Loan Abuse
Overstating your turnover or splurging the funds on a privately owned Tesla instead of your company? That’ll do it. This is currently the number one reason for disqualifications, often carrying no less than a 7-8 year ban, even for minor slip-ups (ouch!).

2. Fraudulent Transfers
Stripping your company of assets to keep them out of reach from creditors is a fast track to the naughty list.

3. Wrongful Trading
Continuing to trade while your company is insolvent (and harming creditors in the process) shows unfit conduct.

4. Ignoring the Books
If your accounting records are in worse shape than your inbox on a Monday morning, that’s a red flag. Failing to maintain proper books is a serious offence.

5. Ghosting Companies House
Not filing your accounts or returns is a no-no. It signals to regulators that something is being hidden, and they tend to investigate accordingly.

6. Dodging Tax
Not filing tax returns or fairly paying tax? HMRC will notice. So will the Insolvency Service. Enough said.

7. Going Off the Grid Post-Insolvency
Once your company enters a formal insolvency process, failing to cooperate with the appointed insolvency practitioner won’t go down well.

8. Peddling Tax Avoidance Schemes
Promoting dodgy tax avoidance schemes is a good way to go from “director” to “defendant”.

How Long Could You Be Barred?

Depending on the severity of the offence, disqualification spans:

  • 2–5 years for relatively serious offences.
  • 6–10 years for more significant misconduct.
  • 11–15 years for truly egregious cases.

In some cases, you can reduce this period with a voluntary undertaking, but be aware- accepting one could be interpreted as an admission of liability, especially if there’s a whiff of criminal conduct involved.

The Cost of Being Unfit

Beyond the obvious reputational damage and business disruption, a disqualified director can face compensation orders, be named and shamed online, and be banned from any business activities involving company formation or management. Further, well drafted Directors’ Service Agreements will contain a clause which states that disqualification as a director can result in the termination of employment, without notice. Therefore, not only may you face hefty fines, your income may also cease. 

So, How Can You Be a Good Director?

Here’s the good news: avoiding disqualification is relatively straightforward if you follow the rules

  • Stay transparent, and don’t treat your company as your personal piggy bank.
  • Understand and uphold your fiduciary and statutory duties.
  • Keep good financial records.
  • Act responsibly if your company is in financial difficulty.
  • Ask for professional advice early.

Think of your directorship like driving a high-performance vehicle. You don’t need to know every engine part but you do need to keep it roadworthy, fuelled, and headed in the right direction.

Final Thoughts

Want to protect your business and stay on the right side of the law? Then steer clear of the disqualification danger zones and keep your entrepreneurial journey firmly on the road.

Being a director isn’t about dodging disqualification, it’s about earning the trust to run a company and growing something that lasts. If you’re unsure about your responsibilities, there’s no shame in getting professional advice. There is shame in pretending you know best while heading for a 15-year ban. Contact Lefteris Kallou to gain clearer understanding of your fiduciary duties.