Disqualification & Restriction Undertakings (New)

Parts 13 / 14 – Restriction and Disqualification

Persons may now give undertakings in relation to restriction and disqualification. The Director of Corporate Enforcement (“DCE”) may accept them. And the person in question avoids a court appearance. This is new. The undertaking would be not to act in a way that would be prohibited, if the person had been subject to one or other order.

Definitions are set out here (Section 849).

What happens is this. In relation to disqualification: the DCE may have reasonable grounds that one or more of the categories for disqualification apply to a person. The DCE delivers a notice to that person, asking whether or not he is willing to give a disqualification undertaking for the proposed period. The director in question will receive an envelope which contains a letter and a “disqualification acceptance document”. The person is given a 21 day period, during which the DCE will not make any court application, to accept or reject the DCE’s proposal. This process is set out in Section 850.

If the person is willing to make the undertaking, the DCE will, as soon as practicable, send the particulars to the CRO, and the details will be entered on the register of disqualified persons.

The person is then deemed to be subject to a disqualification order, but has avoided the time and costs of the court process.

The only time the DCE cannot suggest the undertaking procedure, is where the conduct of the person in question might merit a disqualification period of more than 5 years, or where there is already a disqualification proceeding in being against the person in question.

The same process has been brought in for restrictions. The provisions are the same, and they are set out here (Section 852) and in the sections which follow.