Acting as a director, or taking part in managing a company, while disqualified is a criminal offence under section 13 of the Company Directors Disqualification Act 1986, punishable by up to 2 years in prison, a fine, or both. Under section 15 the person also becomes personally liable, jointly with the company, for all company debts incurred while they were involved in management, and anyone who knowingly takes instructions from them can be liable too.

What counts as acting in breach of a ban?

A disqualification order or undertaking stops the person being a director, acting as a receiver of a company’s property, or being concerned or taking part, directly or indirectly, in the promotion, formation or management of a company, without the court’s permission (sections 1 and 1A of the Company Directors Disqualification Act 1986, the CDDA). Section 22(4) says “director” includes anyone occupying the position of director by whatever name called, so a change of title does not help.

The Insolvency Service’s guidance on the effect of a disqualification gives examples of being concerned in management, including:

  • ordering, paying or negotiating with suppliers or customers;
  • renting or buying business premises;
  • hiring or firing employees;
  • dealing with the company bank account;
  • acting as a management consultant; and
  • taking executive decisions, or making it seem that you are in a position to take them.

The same guidance says the ban does not stop a person having a job with a company, acting as company secretary (though the duties may amount to management), being a shareholder, or trading as a sole trader or in a partnership. It does extend to limited liability partnerships and several other bodies, and to foreign companies with a sufficient connection to Great Britain. A disqualified person must resign existing directorships and must not get other people to manage a company on their instructions.

What are the criminal penalties?

Section 13 of the CDDA makes it an offence to act in contravention of a disqualification order or undertaking, or to commit an offence under section 11 (acting while an undischarged bankrupt). The penalties are:

Route Maximum penalty
Conviction on indictment (Crown Court) Imprisonment for up to 2 years, a fine, or both
Summary conviction (magistrates) Imprisonment for up to 6 months, a fine, or both

Where a company is itself disqualified and breaches the ban, section 14 makes any director, manager, secretary or similar officer guilty too if the offence happened with their consent or connivance or was attributable to their neglect.

A conviction can also lead to a further ban. Section 2 allows a court to disqualify a person convicted of an indictable offence in connection with the promotion, formation or management of a company, for up to 5 years if made by a court of summary jurisdiction and up to 15 years otherwise. The Insolvency Service notes that someone who breaks a disqualification may be disqualified for a further period.

Which debts become personally payable?

Section 15(1)(a) makes a person personally responsible for all the “relevant debts” of a company if they are involved in its management in contravention of a disqualification order or undertaking, or of section 11. Section 15(4) says a person is involved in management if they are a director or are concerned, directly or indirectly, or take part in management.

The relevant debts are the debts and other liabilities incurred while the person was involved in management (section 15(3)(a)). Liability is joint and several with the company and anyone else liable (section 15(2)), so a creditor can claim the full amount from the disqualified person without first exhausting the company. The liability exists whether or not the company is insolvent, although in practice it is usually pursued when the company cannot pay.

This is separate from, and in addition to, the other routes to personal liability such as wrongful trading or personal guarantees. For an overview of all of them, see when directors are personally liable for company debts.

Can the people who take instructions be liable too?

Yes. Under section 15(1)(b), anyone involved in managing a company who acts, or is willing to act, on instructions given without the court’s permission by a person they know to be disqualified or an undischarged bankrupt is personally responsible for debts incurred while they were doing so (section 15(3)(b)). Section 15(5) adds a presumption: having once acted on such instructions, they are presumed willing to act on later instructions from that person unless they show otherwise.

The Insolvency Service also warns that people who manage a company under a disqualified person’s instructions can be prosecuted for assisting the breach, and may themselves be disqualified. This catches the spouse or friend installed as a “front” director while the disqualified person carries on running the business. See shadow and de facto directors.

For people disqualified automatically through sanctions, section 15(3A) gives a defence for debts incurred while they did not know, and could not reasonably have been expected to know, that they were subject to the sanction.

How do breaches come to light?

Disqualifications are public. Companies House keeps the register of disqualified directors, and the Insolvency Service publishes recent disqualifications with details of the conduct. Anyone can search the register, so banks, suppliers, accountants and liquidators often spot a disqualified person running a business. The Insolvency Service considers complaints from the public about breaches, and liquidators of a later failed company report on directors’ conduct, covered in director conduct reports.

What does this look like in a real situation?

Illustration only. Dan is disqualified for five years. He resigns as director of his new trading company and appoints his partner, Sam, as sole director. Dan keeps negotiating with customers, approving supplier orders and using the online banking login. Eighteen months later the company owes £60,000 to suppliers and £25,000 in VAT and PAYE, all incurred during that period, and goes into liquidation.

  • Dan is concerned in management in breach of his ban: he faces prosecution under section 13 and personal liability under section 15(1)(a) for the £85,000 incurred while he was involved.
  • Sam knew Dan was disqualified and acted on his instructions, so Sam is jointly and severally liable for the same debts under section 15(1)(b), may be prosecuted for assisting, and may face disqualification for unfit conduct.
  • Any creditor can sue either of them for the full amount.

How can a disqualified person stay within the rules?

  • Resign every directorship before the ban starts and file the changes.
  • Take employment only in a role without management authority, and get advice on borderline roles, since title is irrelevant.
  • Do not use other people to run a company on your behalf.
  • If a company genuinely needs you, apply for permission first: see getting court permission to act while disqualified.
  • Remember that the bar on undischarged bankrupts in section 11 carries the same penalties: see can an undischarged bankrupt be a company director.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.