This article follows on from my earlier article on director disqualifications to give some idea as to what sort of conduct the authorities consider are worthy of disqualification.
Here are some reported examples of where directors have been disqualified (click on the links in this article to be taken to more information if you should need it)…
An orchestrated attempt to defraud HMRC through the creation of a number of companies to obtain illegal VAT refunds – a blatant fraud on HMRC .
Fresh air invoicing to obtain finance from a bank
Under recording of cash sales resulting in incorrect vat returns being submitted and the non payment of vat
Not doing the right thing in their company at a time of insolvency
Removing assets from the company for their own personal benefit
Unexplained transfers of money out of the company and accepting money from customers for goods/services not provided
Payment of illegal dividend and transfer of funds to an associated company
Diversion of money that the company was entitled to into the director’s own bank account
Another case of transferring large sums of money out of the company to companies they controlled
Using money from the sale of customer assets for their own purposes
Once a company is either known by the directors to be insolvent (or where the directors should know it’s insolvent), it is vital that the directors don’t do anything that is clearly not in the creditors’ interests.
Perhaps these disqualifications could have been avoided had the directors taken advice from a licensed insolvency practitioner at the right time (and followed that advice)?
Failing to do the basics/comply with laws applying to the ongoing business!
Failing to keep proper books and records to explain the company’s transactions
Another failure to comply with the law applying to their business
Acting as the frontman for a person who is banned.
Not doing everything they needed to do to protect vulnerable members of the public
Failing to put in correct tax returns
Breaches of the Privacy and Electronic Communications Regulations
Unfair trading practices and failure to repay the public on a timely basis
Breach of a previous ban, including the banning of the disqualified’s frontman
Failure to maintain proper books and records
Breaking the law by employing illegal foreign workers
Come back here often, I will keep adding examples.