The cheaper disqualification process following The Insolvency Act 2000 - Disqualification Undertakings

The Company Directors Disqualification Act 1986 and Section 6 of The Insolvency Act 2000 set out the cheaper "disqualification undertaking" process leading to disqualification of a director as and from the 2 April 2001

In appropriate cases the Insolvency Act 2000 allows disqualification orders to be made without referring the matter to court through the use of disqualification undertakings. This clearly reduces the cost when the DTI and the director concerned have agreed:

  • a statement of facts and
  • a period of disqualification.

    Section 6 of the Insolvency Act 2000 concerning "disqualification undertakings" became law on the 2nd April 2001. The power to accept disqualification undertakings is conferred on the Secretary of State. Where there is agreement, disqualification can be achieved administratively by the director giving a disqualification undertaking to the Secretary of State. This will result in earlier disqualification for those who give an undertaking. It will also save time and money.

    Section 6 of the Insolvency Act 2000 provides:

    "This section amends the Company Directors Disqualification Act 1986 by providing that directors whom the Secretary of State considers unfit may consent to a period of disqualification without the need for court involvement by giving a disqualification undertaking to the Secretary of State".

    The period of disqualification could be for a period of between 2 and 15 years.

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