FAQ

What is the Disqualified Directors Register?

The Disqualified Directors Register is maintained by Companies House. The 1986 Company Directors Disqualification Act requires that a register must be kept of all the people who have been disqualified from acting as company directors.

This means that the register includes a list of people who have been given disqualification orders, either by a Court or due to action undertaken by the Insolvency Service. It also includes information such as:

• The length of their disqualification

• The section of the 1986 Act under which they have been disqualified

• Any exemptions a banned director has received from a Court in order to allow them to continue acting as a director for specified companies

The Disqualified Directors Register is open to the public for inspection and therefore is most often used by companies or organisations to find out whether a prospective director is currently disqualified. Once a disqualification order period has been completed, the record of the disqualification and the person’s name is deleted from the Register.

What is the average length of a Director Disqualification Order?

According to the latest statistics from the Insolvency Sevice for 2016/17 the average length of disqualification was 5.8 years.

Do I need a specialist solicitor to represent me?

Yes- It is definitely advisable to seek specialist legal advice from a qualified solicitor if you think you are at risk of a Company Directors Disqualification Order.

Company Directors Disqualification Orders are based on specialised and sometimes complicated legislation such as:

• The Company Director Disqualification Act 1986 (as amended)

• Companies Act (2006)

Also, you are going to need the best possible specialist legal advice to help determine your best course of action – whether this is to try and defend your case or to minimise the length of any disqualification order by means of well argued mitigation.

How our specialist solicitors can help you

• Advising whether or not you could have a potential offence to any Disqualification Order application

• Ensuring that all relevant time limits are kept to

• Making sure all procedural steps both you and by the prosecution are carried out properly

• Advising whether a disqualification undertaking might be a beneficial option for you

• Building a defence if you are able to

• Assisting with your Summary of Truth

• Assisting with the Carecraft procedure if necessary, ie negotiating with the DTI Company Directors Disqualification Unit over a statement of facts and the penalty for your actions

• Representing you at court in any contested hearing

• Preparing and presenting mitigation on your behalf to keep down the length of any Company Directors Disqualification Order

• Preparing and making any necessary Court applications if you can show a need to remain as a director of another company despite a Disqualification Order.

Is a disqualification order a civil matter or a criminal offence?

While the 1986 Company Director Disqualification Act does allow for Disqualification Orders to be made in the criminal courts for some cases, most orders are bought in civil courts.

This is due to the fact that just because a director has been negligent or is unfit for their role, it does not mean that they have acted criminally. However, if they have acted in a criminal manner that relates to Companies Act legislation, this could be a case for the criminal courts.

Also, if a disqualified director then disobeys a Disqualification Order , this is a criminal offence and will be treated as such.

Evidence – What is taken into account when considering a Director Disqualification Order?

The actions of directors which are taken into account when deciding whether there are sufficient grounds for a disqualification order or undertaking include:

• Whether any mitigating factors, such as a general economic or industry-specific downturn have contributed to the company’s insolvency, e.g. by affecting its profitability

• Whether the directors have complied with their relevant obligations under the Companies Act, such as keeping accounts and submitting annual returns to Companies House

• Whether the directors have attempted to continue trading or otherwise defraud the company’s creditors while it was insolvent

• Whether the directors made an error of commercial judgement that caused the company’s insolvency, rather than acting as negligent or with misconduct. If a company becomes insolvent then the insolvency practitioner assigned to the case is required to submit a report that details what role, if any, the directors played in the company’s insolvency

If it is decided that there are sufficient grounds to apply for a disqualification order, the director(s) in question might decide to agree to a disqualification undertaking, which avoids court proceedings.

Evidence  and Court proceedings

However, if an application to the court for a Company Director Disqualification Order is made, then the court will take a range of factors into account, including the following:

• The evidence as supplied by the Secretary of State (or body, such as the Insolvency Service, acting on their behalf) and which is contained in the application for the Disqualification Order

• The Summary of Truth as supplied by the director(s) explaining their actions

• The testimony of relevant parties, such as company creditors or accountants.

• The defence, if any, put forward by the director(s) lawyer, such as mitigating factors in the company’s insolvency that might result in a shorter vacation period.

• Whether the disqualified director has previously been subject to a Company Director Disqualification Order

How can I find out if a director has been disqualified – and why?

If the director in question has been disqualified in the past 3 months, you can find the following details by visiting the Insolvency Service online service.

  • the identity of the disqualified director
  • the start date of the disqualification
  • the period of the disqualification
  • details of the director’s misconduct.

Worried about a possible Company Directors Disqualification Order? Call us

If you are the subject of an application for a Company Directors Disqualification Order, don’t delay – contact our specialist team immediately.

o FREEPHONE 0800 1404544 or

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