Director Personal Risk, Duties & Liability

Can a Disqualified Director Run a Business?

Published 2026-09-03 · General information, not advice · 1130 words

No, a disqualified director cannot run a company or be involved in its management, promotion or formation — but the ban is more specific than it sounds. So can a disqualified director run a business at all? The honest answer is: not a limited company, but there are still legal ways to earn a living during a ban.

A disqualification order or undertaking under the Company Directors Disqualification Act 1986 (CDDA) stops you being a director, or being concerned, directly or indirectly, in the promotion, formation or management of a company, for the length of the ban. That is a specific legal restriction, not a total ban on working.

What catches people out is acting like a director in all but name. This is known as a shadow director or de facto director, and it can turn a civil ban into a criminal offence. This article sets out exactly what disqualification stops you doing, what roles remain open, and what happens if you breach the ban.

Can a disqualified director run a business?

Once a disqualification order or undertaking is in force, you cannot be a director of any UK company, and you cannot be concerned, directly or indirectly, in a company's promotion, formation or management. This applies to any company, not just the one that was wound up or investigated.

"Management" is interpreted broadly by the courts under section 1 of the Company Directors Disqualification Act 1986. It can cover:

If you are an undischarged bankrupt, similar restrictions apply automatically, without a separate court order. Read more about what a ban actually covers in our guide to director disqualification and what it means.

Roles you can still hold (employee, some self-employment)

A disqualification does not stop you working. Roles that generally remain open include:

Each of these carries risk if the line between "working for" and "running" becomes blurred. If you are unsure whether a particular arrangement is safe, this is exactly the kind of question a regulated specialist should look at with you.

The shadow and de facto director trap

A shadow director — a person in accordance with whose instructions the formally appointed directors are accustomed to act — is defined in section 251 of the Companies Act 2006. A de facto director is someone who acts as a director in practice, without ever being formally appointed.

Courts look at substance, not job titles. Common warning signs include:

Installing a family member as a figurehead director while you keep running things is one of the most common ways a disqualification is breached — often without the person realising it counts as management.

Applying to court for permission to act

A disqualified person can apply to the court for permission — sometimes called "leave" — to act as director of, or otherwise be concerned in the management of, a named company despite the ban. This is set out in section 17 of the Company Directors Disqualification Act 1986.

The court weighs public protection against the practical need for the person to be involved, and will usually only grant permission where safeguards are in place, such as an independent co-director, financial oversight or regular reporting. Permission must be sought before acting, not after the fact.

Whether you were disqualified by a court order or agreed a disqualification undertaking can affect how this process runs. See our comparison of a disqualification undertaking vs order for the differences.

Penalties for breaching a ban

Breaching a disqualification is a criminal offence under section 13 of the Company Directors Disqualification Act 1986, punishable by a fine, imprisonment of up to two years, or both. Guidance on the scope of disqualification is also published by the Insolvency Service on gov.uk.

Anyone who knowingly acts on the instructions of a disqualified person while managing the company can also be prosecuted, which is why family members or colleagues sometimes get drawn into the consequences of a breach.

Personal liability for debts if you breach

Beyond criminal penalties, a disqualified person who acts in breach of the ban can become personally liable for the relevant debts of the company incurred while they were involved in its management. Anyone knowingly involved alongside them can be jointly liable too.

This sits alongside the wider rules on when a director can be made personally liable for company debts, which we cover in Am I personally liable for company debts? A breach of disqualification is one of the clearest routes to that personal exposure.

Frequently asked questions

Can a disqualified director be self-employed?

Generally, yes. Trading as a sole trader in your own name is not the same as running a company, so it usually falls outside the ban. It does not, however, give you licence to manage a company informally.

Can a disqualified director be a consultant?

Only carefully. Purely advisory work, with no involvement in management decisions, may be possible, but if your advice is effectively directing the company, it can be treated as management and breach the ban.

Can my spouse run the company instead while I stay involved?

Only if they are genuinely making the decisions. If you continue to direct the business behind the scenes, you risk being treated as a shadow or de facto director, regardless of who is named on paper.

Can a disqualified director be a company secretary?

This role can still carry management involvement in practice, so it needs care. It is not automatically safe simply because the job title is not "director".

How do I apply to the court for permission to act?

You (or your solicitor) apply to the court that made the disqualification order, or the relevant court where an undertaking was given, setting out the safeguards proposed. This should be done before you take up the role, not afterwards.

This article is general information, not legal, financial or insolvency advice, and every situation is different. If you would like to understand your options, Harbourfirst can introduce you to a regulated insolvency practitioner or solicitor — Harbourfirst does not advise or act for you itself. Start an enquiry to be introduced to a specialist who can look at your circumstances.

Information, not advice. This guide is general information about a UK legal and financial process, not advice about your situation. If your company is in difficulty, the single most useful step is to speak to a regulated insolvency practitioner or solicitor promptly — Harbourfirst can introduce you to the right one.

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