Director Disqualification

We can advise and assist on director disqualification matters. A disqualification order is made by the court under the Company Directors Disqualification Act 1986. The Act applies not only to a person who has been formally appointed as a director but also to those people who have carried out the functions of a director and to shadow directors. Without specific permission of the court, it disqualifies a person from:

•acting as a director of a company

•taking part, directly or indirectly, in the promotion, formation or management of a company

•being a liquidator or an administrator of a company

•being a receiver or manager of a company’s property.

An order for disqualification can be made under a number of different sections of the Company Director Disqualification Act 1986 (see also section 4 – Criminal proceedings). The order will specify the period of disqualification. For orders made against an unfit director of an insolvent company, there is a minimum period of 2 years and a maximum of 15 years. In April 2001 disqualification undertakings were introduced, which are an administrative equivalent of a disqualification order. An undertaking may be given to the Secretary of State which has the same effect as a disqualification order, but do not involve court proceedings.