Director disqualification time limit
The rules relating to time periods for the Secretary of State to bring formal director disqualification proceedings have recently changed. Effectively, the current position is somewhat transitional and is as follows:
- For all companies which entered into liquidation prior to October 2015, the Secretary of State has 2 years from the date of liquidation to bring formal director disqualification proceedings. If it fails to do so, it is statute barred on the basis of limitation. This effectively means that it cannot bring a claim if it has failed to do so within the 2 year period.
- Section 108 of the Small Business Enterprise and Employment Act 2015 means that from October 2015, the Secretary of State has a 3 year period to bring director disqualification proceedings so long as the misconduct complained of took place from October 2015 onwards.
By way of example, if a company went into liquidation in March 2016, so long as the misconduct complained of took place after October 2015, then the Secretary of State has 3 years from the date of liquidation (i.e. March 2016) to commence formal legal proceedings.
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