An ever increasing number of directors face the prospect, and severe consequences, of being stripped of the entitlement to act as a director of a company, and being involved in the management of a company, as the result of proceedings being taken against them by a government agency seeking to impose a Director Disqualification Order (‘DDO’).
When a company goes into liquidation it does not automatically follow that one or more directors will face disqualification proceedings.
Similarly, a director may face a DDO for his own actions where other directors are not involved and the company is not in liquidation.
In order to obtain a DDO it has to be shown that there has been ‘wrongful trading’ and that a director is ‘unfit’ to continue in that role.
The burden of proof can lead to circumstances where a director who is, or may become, subject to a DDO may make a formal application to the court setting out the reasons for his belief that he should not be prevented from involvement in the administration of a company and seeking permission to remain involved in such activity.
Continuing to be involved in the management of a company or act as a director in these circumstances and without permission is a criminal offence.
Nazaqat Maqsoom of Kangs Solicitors comments on the procedure.
The Relevant Law | Kangs Director Disqualification Order Solicitors
Section 17 of the Company Directors Disqualification Act 1986 provides the statutory source whereby permission to remain as a director or to be involved in the management of a company may be sought.
The court that will hear the application is normally the court which had jurisdiction to wind up the company and in which the original disqualification order was made.
Immediate Procedure | Kangs Regulatory Team
Within twenty one days of a DDO becoming effective, resignation from all current directorships must be implemented and registered at Companies House and all involvement in company management must cease.
If the application under Section 17 for permission is made and granted within the twenty one day period referred to above then, of course, there is no need to resign from any directorships or cease to be involved in company management.
However, this scenario is unlikely given the time involved in preparing the requisite application and awaiting an available hearing date for the application to be considered.
That being the case:
- resignations must be effected, as explained above, pending the hearing of the Section 17 application
- it may be possible to apply for an extension for up to a further twenty one days pending application submission
- it may be possible to request the court to order an interim permission.
- the court may be requested to grant interim permission for a specific period of time for a specific purpose.
How Can We Help You? | Kangs National DDO Solicitors
We have a proven track record handling such cases and our team can guide you through the entire investigation stage, ensure that you are properly advised and that your position is fully protected by:
- advising you on the disclosure provided by the relevant authority
- attending and representing you at interviews
- making representations on your behalf
- representing you in Court proceedings
- advising you on options available and make applications for permission
- responding to an offer of a director disqualification voluntary undertaking
Who Can I Contact For Advice? | Kangs Solicitors
Please feel free to contact our team of lawyers with a proven track-record in defending Director Disqualification through one of the following: