What You Should Understand About Director Disqualification
Director disqualification is certainly a serious matter that is handled with the Insolvency Service,Companies House,The Competition and Markets Authority (CMA),the courts or even a company insolvency practitioner. In case you are a director facing disqualification or perhaps an employee who feels the director with their company is unfit,you should know about how the system works. It is very important know what director disqualification is and the way it works.
What Exactly Is Director Disqualification?
Director disqualification is actually a procedure that is started as soon as the director of a company is found to be unfit. Anyone should be able to report a company’s director’s conduct as being unfit as well as the Insolvency Service or other body will begin an investigation. Unfit conduct will incorporate several different behaviours you need to understand about.
The behaviours will incorporate allowing the business to keep trading when it is not able to pay its debts as well as not keeping proper accounting records. Not sending the accounts and returns to Companies House will also be unfit conduct along with failing to pay the taxes how the company owes. Using any organization assets and funds for private benefit is also regarded as unfit conduct.
In case the Insolvency Service (other other body) finds how the director was unfit,they will be often disqualified for fifteen years. During this time,they will likely be unable to register being a director of any company in the UK or even a company that has connections with all the UK. They may also be not able to form,market or manage a company during this period. They can also face a fine along with a prison sentence up to 2 years in the event the terms of the disqualification are broken.
How Disqualification Works
If there has been a complaint against the director or the company is linked to insolvency proceedings,an investigation will be opened with the Insolvency Service. In case the Insolvency Service feels that you failed to satisfy the legal responsibilities of your role of director,they will likely inform you regarding this in composing. From the communication,they will likely state whatever they feel making you unfit to become director,they are likely to start the disqualification process and the best way to respond.
When faced with this communication,you will have 2 options. The first will be to wait for Insolvency Company to take you to court for the disqualification hearing. You will be able to disagree in court if you find that the Insolvency Service is incorrect in their assessment of your respective conduct.
Another option available will be to present the Insolvency Service with a disqualification undertaking. What this means is that you will be voluntarily disqualifying yourself and you will probably not need to go to court. If you do that,the court action will be ceased and you will probably be disqualified. Our recommendation is that you get legal counsel before you decide to do just about anything.
It is very important note that we now have other bodies that may sign up for director disqualification. This will only be applicable under certain circumstances. These bodies will incorporate Companies House. The courts,accompany insolvency practitioner as well as the Competition and Markets Authority. The procedure with one of these bodies will be comparable to that from the Insolvency Service.
We hope that this - explains the serious nature of Director Disqualification as well as giving you with some information as to what you need to do if you find yourself in this position.