Dorset-based Kari Ridout ran Woodhouse Residential Lettings, collecting more than £34,000 in deposits from tenants between 2015 and 2017.
But instead of placing cash into custodial deposit schemes, the 46-year-old used it to pay the firms’ expenses.
The company went into liquidation in 2017, when it then emerged that deposits had not been kept safe.
Ridout has now been banned for six years from acting as a director or managing a company.
Jane Knight, the Insolvency Service’s deputy head of insolvent investigations, said: “Kari Ridout failed to safeguard the deposits she was entrusted to hold onto, resulting in losses to both landlords and tenants.
“Her conduct fell short of what is required of a director of a limited liability company and her disqualification will act as a deterrent to others from similar conduct in the future.”