Directors Disqualification

Directors Disqualification

Directors Disqualification

One of the duties of an IP is to prepare a report to the directors’ disqualification unit of the Insolvency Service.

Certain matters are taken into consideration when preparing the report:

  • Misfeasance or breach of duty
  • Misapplication or retention of company money or property
  • Transactions defrauding creditors
  • Failure to comply with the Companies Acts
  • Causes of failure and insolvency
  • Trading without regard to the interests of creditors
  • Trading without reasonable prospect of paying creditors' claims
  • Crown debts
  • Phoenix companies
  • Consumer prepayments/deposits
  • Transactions at an undervalue, preferences and dispositions of property
  • Duty to assist the Practitioner and to deliver property

The report is prepared by the IP and is confidential.

It is the disqualification unit’s decision whether to instigate proceedings against the director. Serious breaches could result in a ban from being a director for fifteen years. The ban prevents an individual from being a director, shadow director, or being involved in the promotion, formation or management of a company.