Director disqualification is a very serious matter that is handled by 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 an employee who feels the director of their company is unfit,you need to know about how the system works. It is essential to know what director disqualification is and the way it works.
What Exactly Is Director Disqualification?
Director disqualification is really a method that is started once the director of any company is found to be 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 that you should know about.
The behaviours includes allowing the company to go on trading after it is incapable of 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 as well as not paying the taxes that this company owes. Using any organization assets and cash for private benefit is additionally considered as unfit conduct.
If the Insolvency Service (other other body) finds that this director was unfit,they will be often disqualified for fifteen years. During this time,they are going to struggle to register as being a director of the company in the UK or possibly a company which includes connections using the UK. They is likewise not able to form,market or have a company during this time period. They might also face a fine along with a prison sentence as much as 2 years in the event the regards to the disqualification are broken.
How Disqualification Works
If there has been a complaint against the director or maybe the company is involved with insolvency proceedings,an investigation will probably be opened by the Insolvency Service. If the Insolvency Service feels that you simply failed to meet the legal responsibilities of your role of director,they are going to notify you regarding this on paper. Inside the communication,they are going to state anything they feel enables you to unfit as a director,they are going to start the disqualification process and the best way to respond.
When dealing with this communication,you will have 2 options. The first will be to wait for the Insolvency Company to help you get to court for your disqualification hearing. You will be able to disagree in the court if you find that the Insolvency Services are incorrect within their assessment of the conduct.
The other option available will be to present the Insolvency Service with a disqualification undertaking. This means that you may be voluntarily disqualifying yourself and you will not have to visit court. When you do that,a legal court action will probably be ceased and you will be disqualified. Our recommendation is that you receive legal services prior to a single thing.
It is essential to note that there are other bodies that can sign up 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. This process by using these bodies will probably be much like that from the Insolvency Service.
We hope that this useful post 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.