34:
250:(1982) (Cmnd 8558). That report recommended that application for a mandatory order should be made by the liquidator or, with the leave of the court, by a creditor. This was not acceptable to Parliament, which understandably considered that greater safeguards are necessary in the case of a mandatory order than are required where the court retains a discretion to decline to make an order.
588:
a wide variety of factors, including the former director’s age and state of health, the length of time he has been in jeopardy, whether he has admitted the offence, his general conduct before and after the offence, and the periods of disqualification of his co-directors that may have been ordered by
568:
Assessment is considered to be an objective standard in determining what is ordinarily expected of people fit to be directors of companies. Directors must inform themselves of company affairs and join in with other directors to supervise those affairs. The courts have identified relevant factors for
384:", which is defined as a person in accordance with whose directions or instructions the directors of the company are accustomed to act (but so that a person is not deemed a shadow director by reason only that the directors act on advice given by him in a professional capacity).(s. 9(2) and s. 22(5))
742:
where a person acts contrary to a disqualification order, undertaking or automatic disqualification without the leave of the court, he is guilty of an offence, and is subject on indictment to a sentence of up to 2 years in prison and/or a fine, or on summary conviction to a sentence of 6 months
329:(b) has otherwise been guilty, while an officer or liquidator of the company receiver of the company’s property or administrative receiver of the company, of any fraud in relation to the company or of any breach of his duty as such officer, liquidator, receiver or administrative receiver.(s. 4)
334:
a person is convicted (either on indictment or summarily) in consequence of a contravention of, or failure to comply with, any provision of the companies legislation requiring a return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the
408:
and references to a person’s conduct as a director of any company or companies include, where that company or any of those companies has become insolvent, that person’s conduct in relation to any matter connected with or arising out of the insolvency of that company.(s. 6(3))
176:
or contributary the ability to apply to the court having jurisdiction to wind up the company, for an order to disqualify a director from being concerned in the management of a company for a period up to five years. Such order was up to the discretion of the court.
722:
provision for compensation orders and undertakings on persons who are subject to disqualification orders or undertakings, where the person's conduct as a director caused loss to one or more creditors during the time he was a director of an insolvent company (s.
684:
The factors for determining unfitness in this case relate solely to behaviour concerning the breach of competition law, and the other factors listed in
Schedule 1 do not apply. Disqualification may be made through an order of the court or through an undertaking.
264:
he shall not be a director of a company, act as receiver of a company’s property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has the leave of the court,
718:
requirements for official receivers, liquidators, administrators and administrative receivers to report to the
Secretary of State on the conduct of each person who was a director of a company on the insolvency date or within the three years before (s.
299:
it appears to the court that he has been persistently in default in relation to provisions of the companies legislation requiring any return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the
296:(whether on indictment or summarily) in connection with the promotion, formation, management, liquidation or striking off of a company with the receivership of a company’s property or with his being an administrative receiver of a company.(s. 2)
224:
covered the case where a person had been a director of more than one company which had gone into liquidation while insolvent and his conduct as a director of any of those companies made him unfit to be concerned in the management of a
750:
a person is liable for the debts of a company where he acts contrary to a disqualification order or undertaking, or where he acts or is willing to act on the instructions of another person who is similarly subject to the same.(s.
374:(b) that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of any other company or companies) makes him unfit to be concerned in the management of a company.(s. 6(1))
746:
where a body corporate is convicted of acting contrary to a disqualification order, and it is shown that a person has contributed to the offence through consent, connivance or neglect, both parties are equally liable.(s.
578:
the primary purpose of disqualification is to protect the public against the future conduct of companies by persons whose past records as directors of insolvent companies showed them to be a danger to creditors and
601:
periods over ten years should be reserved for particularly serious cases, which may include cases where a director who has already had one period of disqualification imposed on him falls to be disqualified yet
536:
The extent of the director’s responsibility for any failure by the directors of the company to comply with s. 98 of IA1986 (duty to call creditors’ meeting in creditors’ voluntary winding up).
211:
provided for the case where a person had been persistently in default in relation to statutory requirements for returns, accounts or other documents. Such an order could only be sought by the
585:
the period of disqualification may be fixed by starting with an assessment of the correct period to fit the gravity of the conduct, and a discount is then given for mitigating factors
51:
An Act to consolidate certain enactments relating to the disqualification of persons from being directors of companies, and from being otherwise concerned with a company’s affairs.
906:
431:
Any misapplication or retention by the director of, or any conduct by the director giving rise to an obligation to account for, any money or other property of the company.
246:
396:(a) the company goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up,
809:
Membership in certain professional bodies may also be affected, and members may be required to notify the fact of such disqualification to the body in question.
220:
230:
207:
148: (31 July 2003), summarized the history of disqualification orders in British company law, noting that they were originally created under s. 75 of the
514:
The extent of the director’s responsibility for any failure by the company to supply any goods or services which have been paid for (in whole or in part).
517:
The extent of the director’s responsibility for the company entering into any transaction or giving any preference, being a transaction or preference—
1056:
371:(a) that he is or has been a director of a company which has at any time become insolvent (whether while he was a director or subsequently), and
659:
added ss. 9A - 9E to the Act, which expand the mandatory disqualification régime to cover the following breaches of competition law under the
608:
two to five years’ disqualification should be applied where, though disqualification is mandatory, the case is, relatively, not very serious.
258:
A court may, and under section 6 shall, make against a person a disqualification order, for a period specified in the order, providing that:
240:
The CDDA consolidated the law relating to disqualification orders and introduced the concept of mandatory disqualification, following up on
800:
666:
434:
The extent of the director’s responsibility for the company entering into any transaction liable to be set aside under Part XVI of the
769:
1015:
278:
may also accept disqualification undertakings from such persons in specified circumstances, which will have similar effect.(s.1A)
443:
The extent of the director’s responsibility for any failure by the company to comply with any of the following provisions of the
1032:
1002:
978:
954:
930:
539:
Any failure by the director to comply with any obligation imposed on him by or under any of the following provisions of IA1986—
56:
828:
202:(1945) under the chairmanship of Cohen J (Cmd 6659), extended the grounds upon which a disqualification order could be made.
900:
993:"The Small Business, Enterprise and Employment Act 2015 (Commencement No. 2 and Transitional Provisions) Regulations 2015"
1051:
316:(a) has been guilty of an offence for which he is liable (whether he has been convicted or not) under s. 458 of the
595:
The courts have also provided guidance as to what constitutes an appropriate length for a disqualification period:
38:
921:"The Enterprise Act 2002 (Commencement No. 3, Transitional and Transitory Provisions and Savings) Order 2003"
575:
a company director should realise that his statutory and fiduciary obligations are personal responsibilities
1061:
485:
The extent of the director’s responsibility for any failure by the directors of the company to comply with—
417:
The following factors must be considered in determining whether a director is unfit (s. 9 and
Schedule 1):
794:
553:(d) s. 99 (directors’ duty to attend meeting; statement of affairs in creditors’ voluntary winding up);
339:(whether the contravention or failure is on the person’s own part or on the part of any company).(s. 5)
762:
A person subject to a disqualification order or undertaking will also be disqualified from acting as:
703:. On 1 October 2015, Part 9 of the 2015 Act came into force, which amended the 1986 Act to introduce:
589:
other courts, may be relevant and admissible in determining the appropriate period of disqualification
884:
Secretary Of State For Trade & Industry v
Griffiths & Ors ("Re Westmid Packing Services Ltd")
428:
Any misfeasance or breach of any fiduciary or other duty by the director in relation to the company.
629:, and persons subject to a bankruptcy restrictions order or a debt relief restrictions order(s. 11)
348:
The court may also make an order for a period of up to 15 years where a person has participated in
715:
revision of the procedure for determining the unfitness of directors and shadow directors (s. 106)
635:
those subject to a disqualification order under corresponding
Northern Ireland legislation(s. 12A)
365:
The court shall make a disqualification order against a person in any case where it is satisfied—
215:, as it was not a requirement that the company should be insolvent or in the course of winding up.
98:
387:
The maximum period for such and order is 15 years, and the minimum period is 2 years.(s. 6(4))
336:
301:
712:
extension of the régime to persons instructing unfit directors of insolvent companies (s. 105)
345:
The maximum period of the order is 15 years under ss, 2 and 4, and 5 years under ss. 3 and 5.
870:
511:
The extent of the director’s responsibility for the causes of the company becoming insolvent.
46:
661:
887:
531:(b) challengeable under s. 242 or s. 243 of that Act or under any rule of law in Scotland.
8:
844:
655:
524:
476:(h) ss. 398 and 703D (duty of company to deliver particulars of charges on its property).
436:
632:
those who have failed to make a payment under a county court administration order(s. 12)
1036:
997:
973:
949:
925:
782:
445:
323:
318:
293:
275:
212:
194:
188:
156:
150:
849:
824:
626:
165:
145:
788:
605:
six to 10 years should apply for serious cases which do not merit the top category.
349:
169:
164:(1925-1926) under the chairmanship of Mr Wilfred Greene KC (Cmd 2657). It gave the
126:
992:
920:
776:
381:
709:
inclusion of relevant foreign offences as grounds for disqualification (s. 104)
122:
118:
105:
1045:
968:
944:
700:
241:
137:
81:
904:
Ch 164, which referenced Sir
Nicholas Browne-Wilkinson VC's opinion in
625:
undischarged bankrupts, persons subject to a moratorium period under a
308:
582:
the period of disqualification must reflect the gravity of the offence
688:
559:(f) s. 234 (duty of any one with company property to deliver it up);
781:
a trustee of an occupational pension scheme without leave from the
173:
399:(b) an administration order is made in relation to the company, or
281:
180:
The scope of that provision was subsequently expanded as follows:
522:(a) liable to be set aside under s. 127 or ss. 238 to 240 of the
467:(d) s. 352 (obligation to keep and enter up register of members);
556:(e) s. 131 (statement of affairs in winding up by the court);
544:(a) s. 22 (company’s statement of affairs in administration);
675:
agreements preventing, restricting or distorting competition
547:(b) s. 47 (statement of affairs to administrative receiver);
234:
extended the maximum period of disqualification to 15 years.
803:
and various other health commissions and social care bodies
402:(c) an administrative receiver of the company is appointed;
253:
247:
Insolvency Law and
Practice, Report of the Review Committee
550:(c) s. 66 (statement of affairs in Scottish receivership);
494:(a) s. 226 or s. 227 (duty to prepare annual accounts), or
821:
768:
a charity trustee without permission of the court or the
569:
determining the length of the disqualification period:
461:(b) s. 222 (where and for how long records to be kept);
619:
The following persons are automatically disqualified:
562:(g) s. 235 (duty to co-operate with liquidator, etc.).
969:"Small Business, Enterprise and Employment Act 2015"
473:(f) s. 363 (duty of company to make annual returns);
268:
he shall not act as an insolvency practitioner.(s.1)
890:, 2 All ER 124, 2 BCLC 646 (16 December 1997)
464:(c) s. 288 (register of directors and secretaries);
412:
286:The court may make a disqualification order where:
129:to be disqualified in certain cases of misconduct.
818:
697:Small Business, Enterprise and Employment Act 2015
690:Small Business, Enterprise and Employment Act 2015
458:(a) s. 221 (companies to keep accounting records);
160:), which was enacted on the recommendation of the
192:(subsequently consolidated as section 188 of the
1043:
497:(b) s. 233 (approval and signature of accounts).
200:Report of the Committee on Company Law Amendment
282:Disqualification at the discretion of the court
819:Walters, Adrian; Davis-White, Malcolm (2010).
743:and/or a fine at the statutory maximum.(s. 13)
823:(3rd ed.). London: Sweet & Maxwell.
793:a director, trustee or committee member of a
614:
470:(e) s. 353 (location of register of members);
355:
162:Report of the Company Law Amendment Committee
801:Council for Healthcare Regulatory Excellence
154:(subsequently consolidated as s. 275 of the
115:Company Directors Disqualification Act 1986
22:Company Directors Disqualification Act 1986
667:Treaty establishing the European Community
142:Official Receiver v Wadge Rapps & Hunt
770:Charity Commission for England and Wales
641:
360:
254:Disqualification orders and undertakings
1057:United Kingdom Acts of Parliament 1986
1044:
646:
504:Where the company has become insolvent
380:A "director" is deemed to include a "
99:Text of statute as originally enacted
901:Re Sevenoaks Stationers (Retail) Ltd
440:(provisions against debt avoidance).
13:
812:
106:Revised text of statute as amended
14:
1073:
1026:
311:of a company, it appears that he—
757:
734:
413:Standard for assessing unfitness
390:A company becomes insolvent if—
125:and sets out the procedures for
39:Parliament of the United Kingdom
32:
729:
1033:Disqualified Director Database
1009:
985:
961:
937:
913:
893:
877:
868:Jonathan Parker J's ruling in
862:
292:the person is convicted of an
1:
907:Re Lo-Line ElectricMotors Ltd
855:
1017:Effect of a Disqualification
888:[1997] EWCA Civ 3013
678:abuse of a dominant position
653:Effective 20 June 2003, the
140:, in the opinion he gave in
7:
838:
71:England and Wales; Scotland
10:
1078:
1052:United Kingdom company law
795:registered social landlord
615:Automatic disqualification
356:Mandatory disqualification
244:'s recommendations in the
132:
18:United Kingdom legislation
104:
97:
90:
80:
75:
65:
55:
45:
31:
26:
67:Territorial extent
337:registrar of companies
302:registrar of companies
146:[2003] UKHL 49
1003:The National Archives
979:The National Archives
955:The National Archives
945:"Enterprise Act 2002"
931:The National Archives
871:Re Barings plc (No 5)
642:Subsequent amendments
361:By order of the court
307:in the course of the
772:(as the case may be)
662:Competition Act 1998
1062:Corporate directors
845:Insolvency Act 1986
695:In March 2015, the
656:Enterprise Act 2002
648:Enterprise Act 2002
525:Insolvency Act 1986
437:Insolvency Act 1986
221:Insolvency Act 1976
23:
1037:Insolvency Service
998:legislation.gov.uk
974:legislation.gov.uk
950:legislation.gov.uk
926:legislation.gov.uk
783:Pensions Regulator
446:Companies Act 1985
324:fraudulent trading
319:Companies Act 1985
294:indictable offence
276:Secretary of State
231:Companies Act 1981
213:Secretary of State
208:Companies Act 1976
195:Companies Act 1948
189:Companies Act 1947
157:Companies Act 1929
151:Companies Act 1928
21:
850:UK insolvency law
830:978-1-84703-333-8
627:debt relief order
198:), following the
166:official receiver
127:company directors
111:
110:
27:Act of Parliament
1069:
1020:
1013:
1007:
1006:
989:
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965:
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958:
941:
935:
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911:
897:
891:
881:
875:
866:
834:
799:a member of the
789:police authority
350:wrongful trading
242:Sir Kenneth Cork
121:) forms part of
68:
36:
35:
24:
20:
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841:
831:
815:
813:Further reading
777:school governor
760:
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732:
693:
651:
644:
617:
415:
382:shadow director
363:
358:
284:
256:
135:
93:
92:Status: Amended
66:
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33:
19:
12:
11:
5:
1075:
1065:
1064:
1059:
1054:
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1039:
1028:
1027:External links
1025:
1022:
1021:
1008:
1005:, SI 2015/1689
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960:
936:
933:, SI 2003/1397
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987:
981:, 2015 c. 26
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957:, 2002 c. 40
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939:
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761:
730:Consequences
701:Royal Assent
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694:
689:
683:
660:
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618:
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503:
502:
444:
435:
421:In all cases
420:
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273:
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219:
218:S. 9 of the
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179:
161:
155:
149:
141:
138:Lord Millett
136:
114:
112:
86:25 July 1986
82:Royal assent
15:
1046:Categories
874:1 BCLC 433
856:References
309:winding up
170:liquidator
119:1986 c. 46
61:1986 c. 46
47:Long title
1035:from the
699:received
449:, namely—
352:.(s. 10)
839:See also
225:company.
174:creditor
57:Citation
665:or the
304:.(s. 3)
172:or any
133:History
910:Ch 477
827:
602:again.
579:others
168:, the
886:
326:), or
144:
76:Dates
825:ISBN
723:110)
719:107)
528:, or
274:The
113:The
751:15)
747:14)
265:and
1048::
1001:,
995:,
977:,
971:,
953:,
947:,
929:,
923:,
775:a
669::
833:.
322:(
117:(
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