Thursday, 21 November 2013

Disqualification Undertakings – the present law

The present law is enshrined in Section 1A(1) of the Company Director Disqualification Act 1986. 

Section 1A(1) enables a person to give an undertaking meaning that that he/she:

(a) will not be a director of a company, act as a 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 permission of the Court, and 

(b) will not act as an insolvency practitioner. 

Disqualification undertakings are only available where disqualification proceedings are proposed following the insolvency of a company (Section 6 of the Company Directors Disqualification Act 1986) or following an investigation of a company by the Secretary of State (Section 8 of the Company Directors Disqualification Act 1986).  Disqualification undertakings are more commonly entered into in the first situation.