What Is A Director Disqualification Undertaking?
This undertaking has a similar effect to a Director Disqualification order, but it is entered into voluntarily without the need for court proceedings. The Secretary of State must be satisfied that the director is unfit to take part in the management of a company. They must be prepared to admit to being disqualified before accepting a Disqualification Undertaking.
Top Tip: A breach of a disqualification order can have criminal implication. This is including imprisonment for up to 2 years, and/or fine.
Top Tip: Did you know that the undertakings are registered on a central register of Disqualified Directors, to which the public have access?
What Other Actions Might Be Taken?
A Director Disqualification Order or Undertaking, is only there to deal with the disqualification claim.
If there are other claims which may be bought against you in respect of the liquidated company, then the liquidator will need to prove these claims in their own right. A liquidator cannot rely on the fact of a disqualification to try, and bring other claims against a director.
Top Tip: However, it is important to be aware that the disqualification undertaking/orders are publicly advertised at Companies House. Therefore in any other proceedings, it can be referred to by way of evidence of misconduct.
What Are The Effects Of A Director Disqualification Order, Or Disqualification Undertaking?
If A Director Disqualification Order is made, you cannot, without permission of the court:
1) Be a director of any company registered in the UK.
2) Act as a director of an overseas company that has connections with the UK.
3) Have direct or indirect involvement information, marketing or management of a company.
4) Or be a liquidator, or administrator of a company. Including acting as an insolvency practitioner.
There are other restrictions if you’re disqualified. You cannot:
5) Sit on the board of a charity, school or police authority.
6) Be a pension trustee for a charity.
7) Registered as a social landlord.
8) Sit on a health board, or social care organisation.
9) Or be a Solicitor, Barrister or an Accountant.
- If the director can persuade the Secretary of State that he did not engage in “Unfit” Conduct.
- At the Final Hearing, if the director succeeds in his defence.
- If the director enters into a Director Disqualification undertaking.
A director can give a disqualification undertaking at any stage in the proceedings to the Secretary of State. It has the same effect as a disqualification order and will put a stop to the court proceedings.
The director will be expected to pay the costs and expenses incurred in the proceedings to the date of undertaking. The proceedings can be lengthy therefore costs can amount up. It is unlikely that Legal Aid will be available to cover Director Disqualification proceedings.
To make a free enquiry relating to a potential Directors Disqualification matter, call us today on 01908 414990. Complete our Free Enquiry Request for a confidential and no obligation discussion. Let one of our expert team discuss your situation and the options available to you.