Directors Duties and Disqualification

A breach of directors’ duties allegation or a disqualification notice from the Insolvency Service can escalate within weeks, and the decisions you make early on shape both your personal liability and your future as a director. Our corporate and commercial law solicitors, based in Holborn and with over 20 years of experience, will assess your exposure and swiftly set out the strongest course of action.

If you are a director facing an allegation of breach of duty, or your company is approaching insolvency, the decisions you make now affect your personal liability and your ability to act as a director in future. Our corporate and commercial solicitors advise directors and companies on duties, conflicts, and disqualification proceedings. You can trust that we will advise you honestly and protect your best interests throughout.

What does our directors’ duties and disqualification service cover?

Directors face personal liability exposure when duties are breached or a company becomes insolvent, and early advice can change the outcome. We advise and act on:

Advising directors on their general duties under sections 171 to 177 of the Companies Act 2006, including the duty to promote the success of the company and the duty to exercise reasonable care, skill, and diligence.
Conflicts of interest and related-party transactions, advising on declaration requirements and board authorisation.
Defending directors facing allegations of breach of duty, misfeasance, or wrongful trading brought by the company, shareholders, or a liquidator.
Advising directors of companies in, or approaching, financial difficulty on their duties to creditors and how to minimise personal risk.
Responding to disqualification proceedings brought by the Insolvency Service under the Company Directors Disqualification Act 1986, including negotiating disqualification undertakings as an alternative to court proceedings.
Advising on the consequences of disqualification, including the restriction on acting as a director or being involved in company management.
Applications for permission to act despite disqualification under section 17 of the Company Directors Disqualification Act 1986, where the court retains discretion to grant leave in specific circumstances.
Advising shareholders and companies bringing claims against directors for breach of duty.
Indemnity and insurance considerations for directors, including directors’ and officers’ liability insurance.

Why choose Law Lane Solicitors for directors’ duties and disqualification matters?

Disqualification proceedings and breach of duty claims move fast once the Insolvency Service or a liquidator gets involved, and waiting until a formal notice arrives costs you time you need to shape the outcome. Our company and commercial team advises directors from the first sign of a problem, whether that is a wrongful accusation of misfeasance, a conflict of interest on the board, or your company sliding toward insolvency where personal exposure builds by the week.

We give you a straight assessment of your personal risk and what can realistically be done about it. We negotiate disqualification undertakings where that serves you better than contested proceedings, and we fight allegations of breach of duty head-on where the evidence supports it. As a full-service firm, we also advise on the insurance, governance, and insolvency issues that sit alongside a director’s personal exposure.

Get in touch

If you need guidance on your duties, or you are facing disqualification proceedings, our commercial team can advise you on protecting your position. Phone 020 7870 4870 or email info@lawlanesolicitors.co.uk to make an appointment.

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Frequently Asked Questions – Directors Duties and Disqualification

What are a director's main legal duties?

Sections 171 to 177 of the Companies Act 2006 set out seven general duties, including acting within the company’s constitution, promoting the company’s success for the benefit of its members, exercising independent judgment, exercising reasonable care, skill and diligence, avoiding conflicts of interest, not accepting benefits from third parties, and declaring any interest in a proposed transaction. You owe these duties to the company itself, not to individual shareholders, employees, or creditors directly. We advise you on what these duties require for your specific decisions.

Can a director be personally liable for company debts?

Limited liability generally protects you from personal liability for the company’s debts. That protection falls away if you have personally guaranteed a debt, or if you are found liable for wrongful trading under section 214 of the Insolvency Act 1986 for continuing to trade after you knew, or ought to have known, there was no reasonable prospect of avoiding insolvent liquidation. We advise you on your duties and how to protect your position if the company runs into financial difficulty.

What can lead to a director being disqualified?

Under the Company Directors Disqualification Act 1986, you can be disqualified for unfit conduct connected with an insolvent company, persistent breaches of companies legislation, fraud in a winding up, or participation in wrongful trading. The most common route is disqualification for unfitness under section 6 of the Act, carrying a minimum of two years and a maximum of fifteen. We represent directors from the point the Insolvency Service first raises concerns.

What happens if I am disqualified as a director?

A disqualification order or undertaking under the Company Directors Disqualification Act 1986 stops you acting as a director, or being directly or indirectly involved in promoting, forming, or managing a company, for the period specified. Acting in breach is a criminal offence under section 13 of the Act, carrying up to two years’ imprisonment or a fine on indictment, and it can also expose you to personal liability for the company’s debts. Under section 17 of the Act, the court has discretion to grant you permission to act despite disqualification in limited circumstances, and we advise on whether an application is realistic in your case.

How much does an initial consultation cost?

We offer a fixed-fee initial consultation for company and commercial matters. At that meeting, we listen to your situation, identify the legal issues, and explain the steps and costs involved. Get in touch to arrange a time.