It is possible for a director to make an application to remain acting as a director or be involved in the management despite a disqualification order or undertaking. We have a 100% success record in these applications going back to 2002. Our team can help you back into business.
If the Secretary of State has issued disqualification proceedings against you seeking an order that you be disqualified then there are lots of things you should be thinking about as part of your overall strategy. Our experts at Francis Wilks & Jones can help put in place the right strategy for you at the outset of any claim.
- do you give an undertaking – and what are the implications of this?
- what is your current job and what are your future personal / business plans;
- are you near retirement or at the outset / midway through your career;
- can you continue as a sole trader?
- what other restrictions / consequences would a disqualification order have?
- how much will it cost?
- how long will it take?
- how much time will it take up to defend a claim?
The above are just some of the issues to consider when mapping out the right way forward.
In many cases a director doesn’t want to get involved in a lengthy claim – especially where there is the ability to ask the court for permission to remain a director despite disqualification.
Asking the court for permission to remain a director
A solicitor will be required to apply for permission for someone to act as a director, whether this is before your disqualification commences or after.
A detailed application and supporting evidence will have to be drafted dealing with key issues in respect of
- the previous company;
- your current (or previous) disqualification;
- the new company – its finances, management structure, business, risks it faces and dealing with the problems or misconduct that arose before.
Once this is dealt with, the proceedings are issued and a hearing date fixed, preferably for a lengthy period of time necessary to deal with all of the substantive matters involved (including the need for the Secretary of State to set out its case before the Court and draw the court’s attention to public interest issues).
Some of the public interest concerns raised by the Secretary of State may be resolved via exchanges between the director/secretary of State’s solicitors before the hearing. Otherwise, such matters must be resolved at the hearing.
Court’s discretion in permission applications
The court has a discretion as to whether permission should be granted for a director to act as a director of the named company(s).
The court must not only consider the public interest purpose of the disqualification proceedings, but also the public interest risk to the current company and its stakeholders in not granting permission for the director to act as a director of this new company notwithstanding the disqualification.
The court will consider the period of disqualification and the current company’s financial and other circumstances and the representations from the Secretary of State when reaching its decision.
Order granting permission
It is important that the order granting permission is correctly drafted with the appropriate conditions attached to regulate the affairs of the new company, as a term of providing a director with permission to commence or continue acting in this capacity.
If such conditions are not attached, or are attached but in insufficient detail, the Secretary of State will raise concerns and the court will not grant leave to act.
As part of the terms of such an order, as it is granted on a discretional basis following a director’s disqualification, the director will have to pay the Secretary of State’s reasonable legal costs.
Importance of expert legal advice
Without a solicitor who holds the requisite experience of such matters, this application is likely to fail as a result of the failure to adhere to numerous strategical and procedural requirements (almost all of which are not set down in any manual or statute). We are the team to help – we have a 100% success rate since 2002.
At Francis Wilks & Jones we have considerable experience of making applications for permission / leave to act as a director and pursuant to Section 17 Company Director disqualification Act 1986. We have a 100% success rate going back to 2002. We also hold the record for the most companies in a single application – 17. Managed correctly a director will obtain leave to act notwithstanding his/her disqualification. Your chances of success are greatly enhanced with our expert team.