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A compensation process is also being introduced to provide better financial redress for the loss creditors have suffered as the result of the conduct of disqualified directors.
The company director disqualification process is strengthened so that from 1 October 2015 the law states that the Secretary of State can seek to have a director of a limited company disqualified if they:
The nature and extent of any harm and loss caused must also now be considered when deciding if disqualification is appropriate.
The Secretary of State can, for unfit conduct occurring after 1 October 2015, use information from other regulators in disqualification proceedings.
The maximum period of time elapsing between a company being declared insolvent and the Secretary of State seeking disqualification proceedings increases from 2 to 3 years.
A disqualified director can in future be required by the Court to pay compensation to creditors who have lost out financially for unfit conduct that occurs after 1 October 2015.
These changes follow the passage of the Small Business, Enterprise and Employment Act 2015 which received Royal Assent in March.
Prescribed forms DQ01 – Disqualification order against an individual and DQ02 - Disqualification order against a corporate body or firm are amended by new 2015 regulations coming into force 1 October 2015
