Acting as Director Whilst Disqualified – What happens when you get caught?

A stark warning to disqualified directors thinking of acting as de facto or shadow directors, despite disqualification. Whilst the facts of this case were more clear cut than is often the case, the Courts showed that they will come down hard on disqualified directors who think that, by not being legally appointed as a director at Companies House, they can get away with running a company from behind the scenes.

On 16 October 2014 two disqualified directors, Mark Brafman and Bulbinder Singh Sandhu, were sentenced to a combined 13 months in prison, and disqualified for a further 12 years each, for being in control of a company while banned from doing so.

Mr Brafman was sentenced to 8 months in prison after pleading guilty to acting as a director of three companies whilst disqualified and of a fourth whilst an undischarged bankrupt.

Mr Singh Sandhu pleaded guilty to acting as a director of 2 of the companies whilst disqualified and was sentenced to 5 months imprisonment. Both defendants were further disqualified from acting as directors of a limited company for 12 years each from 16 October 2014.

As always, if in doubt, seek legal advice on applying for “Permission to Act” as director despite disqualification.

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