Elliot Green explains how the process works, and why it’s vital a director facing disqualification should seek expert advice.
Director disqualification proceedings arise from an adversarial process enabled by the Company Directors Disqualification Act 1986 (“the Act”). In the blue corner is the Secretary of State. In the red corner is the director(s) against whom allegations of unfitness will have been levied.
It is a trial of the evidence and the burden is on the Secretary of State of the Department for Business, Energy & Industrial Strategy to prove its case. The Secretary of State will typically delegate its role to the Insolvency Service.
The outcome is no forgone conclusion. However, if the Secretary of State is successful then the Court will grant a director disqualification order which prevents the relevant director(s) from embarking upon activities involved in the promotion, formation or management of a limited company for a period of time which ranges from two to 15 years.
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