Director information hub: possible consequences of not following the rules
Failing to meet your obligations can lead to serious consequences, including criminal charges, civil penalties or other action against you or the company.
Possible consequences of not following the rules
Not following the rules can lead to:
Criminal prosecution
If convicted of a crime, your company or you may face fines, confiscation orders, community orders or imprisonment.
Financial penalties
You or your company may have to pay Court fines, compensation or other civil financial penalties.
Personal consequences
If your company continues trading when you know it cannot pay its debts, or if you use a prohibited name in a successor company, you might be held personally liable for your company’s debts.
You could be disqualified from being a company director for up to 15 years. Among other things, this can prevent you from working in certain industries.
Operational consequences
Your company may have to stop trading. It could be wound up by a court as a direct result of not following the rules, or because it cannot pay the penalties.
Regulatory consequences
If you or your company fail to meet the standards required in a regulated sector, you or your company can receive fines, loss of licences or trading restrictions.
Investigations
If your company does not follow the rules, criminal or civil investigations might take place into:
- you
- your company
- other directors
- employees
- the company’s contractors
Reputational consequences
If you or your company is investigated or receive a penalty for not following the rules, this could be reported on the news, social media or elsewhere on the Internet and affect you or your company for a long period of time.
Example:
HMRC may impose financial penalties for issues such as late filings, inaccurate returns or tax evasion. They may ask for a deposit or bond if they believe your company or a new company will not pay tax on time. In severe cases they may prosecute. If your company cannot pay the penalties, your company might be wound up and you and any other directors disqualified.
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Updates to this page
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Minor edit. 'Failing to meet your obligations can lead to serious consequences, including criminal charges, civil penalties or other action against you or the company.'
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First published.