Many company directors don’t realise that if they face disqualification, the period when disqualification proceedings can be started against them has increased from 2 to 3 years after new law was passed last year. Here’s a summary of Directors’ Disqualification the changes and what they might mean to you: In the words of the Department for Business, Innovation & Skills, the aim of the new law was to:
“Modernise and strengthen the director disqualification regime to give the business community and consumers’ confidence that wrongdoers will be barred as directors”.
It is also to simplify the procedure used by insolvency practitioners (liquidators, administrators, administrative receivers) and official receivers to report on the conduct of the directors of insolvent companies and to strengthen mechanisms that compensate creditors for director misconduct. The law was introduced, amongst other things to:
Commenting, Gavin Pickering, Partner at stevensdrake, said: “The changes are intended to provide a simplified system for reporting the misconduct of a director and in doing so increase creditors’ confidence in the process. It should also lead to more effective interventions and return greater compensation for those suffered at the hands of director misconduct.Unfortunately the longer period of time within which disqualification proceedings may be started means it will take longer for directors to know if they are in the clear so they can move on."