It is a Category 2 Offence for a person who is restricted or disqualified to act in relation to a company in a way that he has been prohibited from doing. This means that, at its most extreme, the penalty is a maximum fine of €50,000 and/or maximum prison sentence of 5 years. (Section 855).
If a restricted person is found guilty of the above, he will be disqualified from the date of conviction (the standard period is 5 years, but this is up to the court, as stated in Section 857). If the person was already disqualified, the disqualification order may be extended by 10 years.
Section 856 seeks to prevent people from getting around a disqualification order. Such a person could try and circumvent the order by using a spouse or a relative to act as director in his place, so this section makes it an offence to act in accordance with the directions or instructions of such a person, “knowing that that other person” is subject to a disqualification order. A person convicted under this section will himself become subject to a disqualification order. This section derives from Section 164 of the Companies Act 1990, but only applies to directors, and not to other officers as well, as it did before.
A director who acted in a prohibited manner may have to repay the company his salary or director’s fees (Section 858). The company may pursue the director for the sum in question as a simple contract debt.
A director who acted in a prohibited manner in relation to a company which is subsequently wound up – within 12 months of the director acting in the prohibited way – may be liable to contribute to some or all of its debts (Section 859).
Any director who is found – as per Section 856 – to have acted in accordance with the directions or instructions with a restricted or disqualified director may also be liable to contribute to some or all of the company’s debts for the period when he or she was taking those directions or instructions (Section 860).
If directors are under investigation for civil or criminal proceedings relating to the company, the Court may require him to give certain information, which is set out here (Section 862).