Can a Disqualified Director be a Sole Trader?

Operating as a Sole Trader following Director DisqualificationYes, a disqualified director can be a sole trader, but is not legally allowed to serve as a director of a company, they are still able to operate as a sole trader.

A sole trader is a type of business structure in which an individual runs a business as an individual rather than as a company.

As a sole trader, the disqualified director would be responsible for all aspects of the business, including making decisions, managing finances, and assuming liability for any debts or losses.

It is important to note, however, that a disqualified director may be subject to certain restrictions or obligations as a result of their disqualification, and they should seek legal advice if they are considering setting up a business as a sole trader.

Can you be a sole trader while disqualified as director

Operating as a Sole Trader following Director Disqualification

Operating as a sole trader following a directors disqualification can be a viable option for individuals who have been barred from serving as directors of companies. As a sole trader, the disqualified director would be responsible for running the business on their own, making decisions, managing finances, and assuming liability for any debts or losses.

It is advisable for a disqualified director to seek legal advice before setting up a business as a sole trader, to ensure that they are aware of any potential restrictions or obligations that may apply.

Additionally, a disqualified director should be mindful of the additional responsibilities and risks associated with operating as a sole trader, and ensure that they have adequate insurance coverage and financial resources to support their business.

Can I get someone else to run my business for me?

If you have been disqualified as a director, it is important to understand the limitations of your disqualification. While you are not banned from working as an employee for the same company or from holding shares in a private limited company, you should exercise caution in your actions and representation.

You should be mindful of what roles you become involved in, and it is generally advisable to seek court permission before taking on the role of a director again. It is important to understand the terms of your disqualification and to act in accordance with them in order to avoid any further legal issues.

What happens if I contravene the order or undertaking?

If you have been disqualified as a director, it is important to take the terms of your disqualification seriously. If you contravene the order or undertaking that has been issued to you, you could be committing a criminal offense. This means that you could potentially face imprisonment for up to two years, as well as fines.

Additionally, if you contravene the order or undertaking, you may become personally liable for any debts that the company incurs during this time. This means that you could be held financially responsible for any financial obligations that the company has.

It is also important to note that anyone who acts on your instructions while you are in violation of your disqualification could also be held personally liable.

Read more: Director Disqualification Time Limit

Conclusion

In conclusion, if you have been disqualified as a director, you may still be able to continue trading as a sole trader. However, it is important to understand the terms of your disqualification and to act in accordance with them. This may include seeking permission from the court before taking on the role of a director again, and being mindful of the actions you take and the roles you become involved in.

It is also advisable to seek guidance from a legal professional to ensure that you are fully aware of your rights and responsibilities as a disqualified director. By following these guidelines, you can help to ensure that you do not run afoul of the terms of your disqualification and that you are able to continue trading as a sole trader.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline | + posts

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.