Director disqualification is an extremely serious matter which can be handled through the Insolvency Service,Companies House,The Competition and Markets Authority (CMA),the courts or even a company insolvency practitioner. When you are a director facing disqualification or perhaps employee who feels the director with their company is unfit,you have to know about how the system works. You should know very well what director disqualification is and the way it operates.
Exactly What Is Director Disqualification?
Director disqualification is a method that begins as soon as the director of the company is found to get unfit. Anyone should be able to report a company’s director’s conduct for being unfit and also the Insolvency Service or other body begins an investigation. Unfit conduct would include several different behaviours that you should know about.
The behaviours would include allowing the business to keep trading after it is not able to pay its debts along with not keeping proper accounting records. Not sending the accounts and returns to Companies House can also be unfit conduct as well as not paying the taxes the company owes. Using any organization assets and funds for private benefit is additionally considered as unfit conduct.
In the event the Insolvency Service (other other body) finds the director was unfit,they are often disqualified for fifteen years. During this period,they will likely be unable to register as being a director of a company in the UK or perhaps a company containing connections with the UK. They may also be struggling to form,market or run a company during this period. They can also face a fine and a prison sentence as high as two years in the event the regards to the disqualification are broken.
How Disqualification Works
If there has been a complaint against the director or perhaps the company is involved with insolvency proceedings,an investigation will be opened through the Insolvency Service. In the event the Insolvency Service feels that you just did not match the legal responsibilities from the role of director,they will likely let you know about this on paper. In the communication,they will likely state whatever they feel causes you to unfit to become a director,they are likely to start the disqualification process and tips on how to respond.
When faced with this communication,you will get 2 options. The first is to wait for the Insolvency Company to require to court for your disqualification hearing. It is possible to disagree in the courtroom if you feel the Insolvency Service is incorrect with their assessment of your respective conduct.
One other option available is to present the Insolvency Service using a disqualification undertaking. This means that you will be voluntarily disqualifying yourself and you will not need to visit court. When you do that,the legal court action will be ceased and you will be disqualified. Our recommendation is that you receive legal counsel before you do anything.
You should note that we now have other bodies that may sign up for director disqualification. This will only be applicable under certain circumstances. These bodies would include Companies House. The courts,accompany insolvency practitioner and also the Competition and Markets Authority. This process with one of these bodies will be just like that from the Insolvency Service.
We hope that this interesting article explains the serious nature of Director Disqualification as well as providing some information as to what you need to do if you find yourself in this position.