Thursday, 21 November 2013

Is a disqualification undertaking a complicated document?

A Disqualification Undertaking is a relatively simply document, no more than 2-3 pages long. The front page sets out the length of time you will be prohibited from being a director and the activities you are not allowed to carry out whilst the order is in place. 

At the bottom of the page is a section for a person to sign the document agreeing to its terms. There is also a box which the Secretary of State then countersigns.

The second page then has what is known as a “schedule of unfitness”. This is simply a summary of the matters which gave rise to a person being deemed unfit to be a director of a company moving forward. 

This schedule is attached to the disqualification undertaking purely for the purpose of any related proceedings.

It is sometimes possible to amend the wording in the schedule of unfitness, although it is not easy to do. However, it can be beneficial in circumstances where a director later wants to seek permission to become a director again or remain a director of his/her current company. A court dealing with any application for permission to remain a director will review the wording of the undertaking. The less “prejudicial” it is, the better the chances of seeking permission.