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Applications for Permission to Act Following Bankruptcy or Disqualification
If you are made bankrupt, or disqualified or about to be disqualified as a director of a company by virtue of a disqualification order or undertaking, you are able to apply to the court for permission to be a director of a company notwithstanding such disqualification.
JMW has extensive experience in advising on and making applications for permission to act following bankruptcy or disqualification. We are also able to advise company directors subject to disqualification on their next steps, in particular, how to avoid inadvertently breaching a disqualification.
How JMW Can Help
In order to make an application to act as a company director following disqualification, the court will need to be satisfied that there is a requirement for an order to be made. You must provide detailed information on your current circumstances and why it is necessary to be a director. You must also provide certain safeguards to ensure the public are protected; these can include, for example:
- Appointing additional or professional directors
- Undertaking that tax returns will be made and paid on time
- Appointing any professional advisors and/or auditors
The scope of conditions that may be acceptable will often be the subject of negotiation both before and after an application is made.
JMW regularly advises and represents directors through the application process and are experts in disqualification proceedings. Our team includes an experienced licensed insolvency practitioner, so we can ensure that the advice we provide is cutting edge and our expertise will help you to find a satisfactory solution.
Making an Application for Permission to Act
An application for permission to act despite disqualification can be made under section 17 of the Company Directors Disqualification Act 1986 (CDDA). The application will require a written statement, which should include a list of proposed conditions that will attach to the permission granted, in order to alleviate any concerns that the Secretary of State and/or the court may have regarding protecting the public interest.
The court must be satisfied that the need for the applicant to act as a director outweighs the public interest.
Inadvertent breaches of disqualification are not uncommon. A disqualified director employed by a new company in a different role to director may still risk being found to be acting in breach of the disqualification. Under these circumstances, a disqualified director may wish to apply to the court to either:
- Seek permission to act to avoid later being found in breach of disqualification
- Declare that their new employment does not breach their disqualification
Under s13 of CDDA, a person guilty of being in breach of a disqualification order or a disqualification undertaking is liable to a fine, imprisonment, or both, and will likely face a further period of disqualification.