What is director disqualification and when does it occur?

Director disqualification is a legal order that prevents an individual from acting as a director or being involved in company management for a set period, usually between 2 and 15 years. It occurs when a court or the Insolvency Service finds that a director has acted unfit to run a company. Common reasons include wrongful or fraudulent trading, failure to keep proper records, tax offences, or allowing a company to trade while insolvent. Disqualification protects the public by removing individuals who have demonstrated misconduct or incompetence from positions of responsibility. Breaching a disqualification order is a criminal offence and can lead to fines or imprisonment. For directors, disqualification is highly damaging, both professionally and personally, as it prevents them from running companies or being involved in corporate management during the disqualification period.