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Set out below in full is section 6 of the Company Director disqualification Act 1986 setting out the general provisions relating to the duty of the disqualification court to disqualify unfit directors of insolvent companies.
Duty of court to disqualify unfit directors of insolvent companies
1. The court shall make a disqualification order against a person in any case where, on an application under this section, it is satisfied:
- that he is or has been a director of a company which has at any time become insolvent (whether while he was a director or subsequently), and
- that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of any other company or companies) makes him unfit to be concerned in the management of a company.
2. For the purposes of this section and the next, a company becomes insolvent if—
- the company goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up,
- the company enters administration,
- an administrative receiver of the company is appointed; and references to a person’s conduct as a director of any company or companies include, where that company or any of those companies has become insolvent, that person’s conduct in relation to any matter connected with or arising out of the insolvency of that company.
3. In this section and section 7(2), “the court” means:
- where the company in question is being or has been wound up by the court, that court,
- where the company in question is being or has been wound up voluntarily, any court which has or (as the case may be) had jurisdiction to wind it up,
- where neither paragraph (a) nor (b) applies but an administrator or administrative receiver has at any time been appointed in respect of the company in question, any court which has jurisdiction to wind it up.
3a. Sections 117 and 120 of the Insolvency Act 1986 (jurisdiction) shall apply for the purposes of subsection (3) as if the references in the definitions of “registered office” to the presentation of the petition for winding up were references:
- in a case within paragraph (b) of that subsection, to the passing of the resolution for voluntary winding up,
- in a case within paragraph (c) of that subsection, to the appointment of the administrator or (as the case may be) administrative receiver.
3b. Nothing in subsection (3) invalidates any proceedings by reason of their being taken in the wrong court; and proceedings:
- for or in connection with a disqualification order under this section, or
- in connection with a disqualification undertaking accepted under section 7, may be retained in the court in which the proceedings were commenced, although it may not be the court in which they ought to have been commenced.
3c. In this section and section 7, “director” includes a shadow director
4. Under this section the minimum period of disqualification is 2 years, and the maximum period is 15 years.
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