Can I be a director again if my company goes bust?
This is a question we are often asked. The answer is yes anyone can be a director of UK limited company. There are surprisingly very few barriers to being a director of a company.
Let’s go back a step. What is a director and who can be one?
A company is a separate legal entity but it cannot do anything as a standalone entity as it is essentially an artificial person (a non-human legal entity that is treated as a person for legal purposes). It cannot enter into contracts or trade per se, for these things to happen it needs directors to act on its behalf who will be legally responsible for running the company’s operations. i.e. a company can purchase and hold property in its own name but it cannot transfer the money or sign any legal documents for the purchase of the property.
Directors must act subject to the articles of association of the company, fiduciary duties and the Companies Act.
A director must be:
- Over 16 (not encouraged as people are only legally recognised as adults when 18)
- Not be an undischarged bankrupt
- Not be disqualified as a director
- Not under restrictions of a Debt Relief Order
- Not disqualified by the company’s article of association
- Not the company’s auditor
So back to the question, can you be a director again if you company has gone into administration or liquidation?
The answer is yes but then there is the issue of what to call your new company and restrictions on the use of a name.
And that is the subject of our next blog!
If you have any questions about the insolvency process, please call our Business Rescue Service now on 0800 118 2948
You don’t know what we can do until you ask.
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