10 THINGS THAT YOU SHOULD CONSIDER WHEN FACED WITH A DIRECTOR DISQUALIFICATION INVESTIGATION

This is the next in the series of my blog for the Director’s Friend.

When the Insolvency Service (the ‘IS’) write to you with perhaps a questionnaire or a ‘section 16’ letter there are a number of issues that you should consider:

  1. You should never deal with the claim yourself as it is not as straightforward as it may seem. What you say could be used in evidence against you and undermine your objective. Always seek and obtain expert legal assistance – use their expertise to assist you and let them deal with any stress for you.
  2. Never just ignore the letters – the investigation and any claim is not going to go away if you just ignore it. It may end up costing you a lot of money with no input from you;
  3. Do not be rushed into a response to the IS within the usually short timescale that they give for a response. Always consider your response carefully with the assistance of experienced solicitors. The solicitors can usually seek and obtain an extension of time to respond on your behalf and take away the stress for you;
  4. You should never respond to the questionnaire without taking experienced legal advice first. That is because you need to be able to fully identify what the IS are investigating and to respond in the right way;
  5. You should never respond to the section 16 threat letter without requesting a copy of the evidence that has been prepared against you. You then need to carefully review the same with an experienced solicitor to formulate the right response;
  6. You should always ask your solicitor to identify whether there is a risk of other claims being made against you or other investigations being carried out. The IS investigation is not always the only one in contemplation. You need to avoid accidentally prejudicing yourself;
  7. Running another company in the background whilst disqualified as a company director (perhaps as a majority shareholder) – you may believe that you can do this. My advice is that you should never do this as the IS do check and you could be at risk of someone complaining to the IS that you are breaching the disqualification. Remember that the fact of your disqualification is made public. The criminal sanctions are draconian; you could be held personally liable for the company debts and you could be disqualified for a longer period of time;
  8. Acting in the management of a company whilst disqualified – you may consider that you can take up another more senior role in the company without being an appointed director. This is not sensible without the right director disqualification legal advice to avoid the draconian consequences outlined above. I have been involved in a case before where the judge found that the disqualified director was acting in the management of a company by arranging that company’s mobile telephone contract;
  9. Is a disqualification inevitable? No not always with the right advice; and
  10. If you are disqualified from being a company director is that it – do you have to wait out your ban period before you can act as a director again. No – please talk to me about obtaining permission to act as a director even whilst disqualified.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification by the IS please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost. I am a game keeper turned poacher.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out or we can liaise with your insurers. Your work will be carried out by me or others under my close supervision. I am happy to come to you to take instructions. My firm is based in London and Hertfordshire, here in the UK.

Finally, is you advisor a practising solicitor (and thus insured to advise you – check with the SRA) and if so is your solicitor a full member of the Insolvency Lawyers Association (‘ILA’) (ask them). Membership of the ILA is a public mark from insolvency peers that your representative has the requisite knowledge, skill and experience to advise you. I am both. Accept no substitutes.

Until the next time…

THE DIRECTORS FRIEND

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