Director disqualification is an extremely serious matter which is handled from the Insolvency Service,Companies House,The Competition and Markets Authority (CMA),the courts or even a company insolvency practitioner. If you are a director facing disqualification or perhaps employee who feels the director of their company is unfit,you have to know about how the system works. It is very important know very well what director disqualification is and how it operates.
What Exactly Is Director Disqualification?
Director disqualification is a procedure that is started if the director of any company is found to get unfit. Anyone should be able to report a company’s director’s conduct as being unfit and the Insolvency Service or other body begins an investigation. Unfit conduct includes a number of different behaviours you need to know about.
The behaviours includes allowing the company to continue trading when it is incapable of pay its debts along with not keeping proper accounting records. Not sending the accounts and returns to Companies House can also be unfit conduct together with failing to pay the taxes that the company owes. Using any business assets and funds for personal benefit is additionally considered as unfit conduct.
In the event the Insolvency Service (other other body) finds that the director was unfit,they are often disqualified for fifteen years. During this time,they are going to be unable to register as being a director of a company in the united kingdom or possibly a company which includes connections with all the UK. They will also be unable to form,market or have a company during this time period. They might also face a fine plus a prison sentence of up to 2 years in the event the regards to the disqualification are broken.
How Disqualification Works
If we have seen a complaint against the director or even the company is linked to insolvency proceedings,an investigation will be opened from the Insolvency Service. In the event the Insolvency Service feels that you simply failed to match the legal responsibilities in the role of director,they are going to notify you regarding this in composing. In the communication,they are going to state what they feel enables you to unfit as a director,they are likely to start the disqualification process and ways to respond.
When dealing with this communication,you will have 2 options. The first can be to wait for the Insolvency Company to help you get to court for your disqualification hearing. It is possible to disagree in the court if you feel that the Insolvency Services are incorrect with their assessment of the conduct.
One other option available can be to present the Insolvency Service with a disqualification undertaking. This means that you are voluntarily disqualifying yourself and you may not need to head to court. Whenever you try this,a legal court action will be ceased and you may be disqualified. It is recommended that you obtain legal counsel prior to do anything whatsoever.
It is very important note that you have other bodies that can submit an application for director disqualification. This are only applicable under certain circumstances. These bodies includes Companies House. The courts,accompany insolvency practitioner and the Competition and Markets Authority. The process by using these bodies will be just like those of the Insolvency Service.
We hope that this - 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.