One of the purposes of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (‘the Bill’), which is currently proceeding through Parliament, is to make provision in relation to the disqualification of directors of companies which have been dissolved without having become insolvent.

The current law is provided by the Company Directors Disqualification Act 1986 (‘the Act’) which provides for disqualification in circumstances where a company has become insolvent.

John Veale of Kangs Solicitors outlines the current position and the anticipated changes.         

The team at Kangs Solicitors has vast experience and is highly regarded nationwide for assisting clients facing allegations of criminal activity of every nature, including those involving breaches of company law, Director Disqualification, Insolvency and Bankruptcy.

Our team is led by Hamraj Kang who is recognised as a leading expert in the field. He is one of only two solicitors nationally to be ranked as a ‘star individual’ for six consecutive years in the legal directory Chambers & Partners.

Other members of the team are ranked in the Legal 500 and also ranked in Chambers & Partners.

For an initial no obligation discussion, please call our Team at any of our offices detailed below:

The Current Law | Kangs Company Offences Defence Solicitors

Section 6 of the Act states:

Duty of court to disqualify unfit directors of insolvent companies.

(1) ‘The court shall make a disqualification order against a person in any case where, on an application under this section, it is satisfied—

(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

(B) that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of one or more other companies or overseas companies makes him unfit to be concerned in the management of a company.’

The minimum period of disqualification under the Act is two years with a maximum of fifteen years.

Anticipated Changes | Kangs Company Insolvency Solicitors

In order to amend the Act, the Bill proposes, inter alia, penalties for directors of companies that have not become insolvent where:

‘(a) the court is satisfied— (i) ……. that the person has been a director of a company which has at any time been dissolved without becoming insolvent (whether while the person was a director or subsequently), and

(b) the court is satisfied that the person’s conduct as a director of that company (either taken alone or taken together with the person’s conduct as a director of one or more other companies or overseas companies) makes the person unfit to be concerned in the management of a company.’

It is anticipated that:                           

  • powers under the Bill would be retrospective, but any action against a director would normally have to be brought within three years.
  • directors of companies that improperly received ‘bounce back’ loans introduced at the commencement of the COVID-19 crisis could be the first targets.

Who Can I Contact for Advice & Help? | Bounce Back Loans Fraud Defence Solicitors

If you are subject to, or anticipate:

please do not hesitate to contact the Team at Kangs Solicitors through any of the following who will be pleased to speak to you:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258 171 | 020 7936 6396 | 0121 449 9888

John Veale
jveale@kangssolicitors.co.uk
0161 817 5020  | 020 7936 6396 07989 521 210

Tim Thompson
tthompson@kangssolicitors.co.uk
020 7936 6396 | 0121 449 9888