Director disqualification is certainly a 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 of their company is unfit,you need to know about how the system works. It is very important determine what director disqualification is and the way it works.
What Exactly Is Director Disqualification?
Director disqualification is a method that is started as soon as the director of the company is found being unfit. Anyone should be able to report a company’s director’s conduct as being unfit and also the Insolvency Service or other body will start an investigation. Unfit conduct will include many different behaviours you need to understand about.
The behaviours will include allowing the business to carry on trading when it is incapable of pay its debts and also not keeping proper accounting records. Not sending the accounts and returns to Companies House may also be unfit conduct in addition to not paying the taxes that the company owes. Using any business assets and cash for personal benefit is additionally seen as unfit conduct.
If the Insolvency Service (other other body) finds that the director was unfit,they are often disqualified for 15 years. During this time,they may struggle to register being a director of any company in the united kingdom or a company containing connections with the UK. They can also be not able to form,market or run a company during this time period. They could also face a fine along with a prison sentence as high as two years when the regards to the disqualification are broken.
How Disqualification Works
If there has been a complaint against the director or maybe the company is linked to insolvency proceedings,an investigation will likely be opened through the Insolvency Service. If the Insolvency Service feels which you did not meet the legal responsibilities in the role of director,they may inform you relating to this in composing. Within the communication,they may state whatever they feel enables you to unfit to become a director,that they are planning to start the disqualification process and tips on how to respond.
When dealing with this communication,you will get 2 options. The first may be to wait for a Insolvency Service to get you to court to the disqualification hearing. It will be possible to disagree in court if you feel that the Insolvency Service is incorrect in their assessment of your own conduct.
One other option available may be to present the Insolvency Service with a disqualification undertaking. This simply means that you may be voluntarily disqualifying yourself and you will probably not need to head to court. Once you try this,a legal court action will likely be ceased and you will probably be disqualified. It is recommended that you get legal services before you decide to do anything.
It is very important note that there are other bodies that can sign up for director disqualification. This will only be applicable under certain circumstances. These bodies will include Companies House. The courts,accompany insolvency practitioner and also the Competition and Markets Authority. The method by using these bodies will likely be much like that relating to the Insolvency Service.
We hope that this a must see post 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 situation.