If you have a criminal record, you may wonder if you’re permitted to set up your own limited company and take on the role of a company director. The good news for you is, yes, you can, provided that you have not been disqualified from being a company director. Let’s explore this in more detail.
Why would an individual be disqualified from being a company director?
Generally, a person would only be disqualified from being a director if they have already held a director position, from which they failed to meet their legal responsibilities or were reported for ‘unfit conduct’ (and found guilty by a court of this).
Legal responsibilities of a company director
A limited company director must:
- Abide by the rules set out in the company’s articles of association
- Report company changes to Companies House
- Maintain the company’s records and registers
- File the company’s annual accounts and tax return (and pay the necessary corporation tax)
- Notify any other shareholders in the company if they stand to benefit from a company transaction
If a director fails to meet their responsibilities, they can be fined, prosecuted, or disqualified from taking on another director role.
Unfit conduct
As well as being disqualified for not meeting their responsibilities, an individual can also be banned from being a director if they are found guilty by a court of unfit conduct. The below behaviours would all be classified as unfit conduct:
- Failing to keep the necessary accounting records
- Not filing the company’s annual accounts or tax return
- Neglecting to pay any tax owed by the company
- Continuing to trade when the company is unable to pay debts
- Spending company money (or using company assets) for personal benefit
Who is permitted to be a company director?
The rules on who can take on the company director role are relatively relaxed. Anyone can be a company director, provided that they have not been disqualified (by a court order) and meet the below criteria.
- They are aged 16 or over
- Are not an undischarged bankrupt
- Have not been disqualified by the company’s articles of association
- Are not the company’s auditor
As you can see there is no reference to criminal record.
The IN01 and AP01 forms
How you appoint a person as a director depends on when they are being appointed.
If the appointment is happening at the same time that the company is being formed, the appointment is made using the IN01: Application to register a company form (if you forming the company online, as most people now do, you probably won’t see reference to this name).
If the appointment is being made after the company has been formed, it is made using the AP01: Appointment of a director form (again, you will not see reference to this name unless you use the paper filing method).
If you were to look at both of the above forms, you will see that nowhere in the company formation process (including the stage dedicated to director appointments) or director appointment process does it mention ‘criminal record’.
This further demonstrates that a person with a criminal record can set up a limited company and be a company director.
Shareholders, secretaries, and people with significant control
As well as a company director, the other ‘titles’ associated with the limited company structure are shareholder, person with significant control (PSC), and secretary (although having a secretary is optional).
A person with a criminal record can be named as a shareholder, a person with significant control, and a secretary.
Thanks for reading
So there you have it, you can set up a limited company and become a company director if you have a criminal record.
Please note that the information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While our aim is that the content is accurate and up to date, it should not be relied upon as a substitute for tailored advice from qualified professionals. We strongly recommend that you seek independent legal and tax advice specific to your circumstances before acting on any information contained in this article. We accept no responsibility or liability for any loss or damage that may result from your reliance on the information provided in this article. Use of the information contained in this article is entirely at your own risk.
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