Companies Act 2006

Power to disqualify

1184 Disqualification of persons subject to foreign restrictions

(1) The Secretary of State may make provision by regulations disqualifying a person subject to foreign restrictions from—

(a) being a director of a UK company,

(b) acting as receiver of a UK company’s property, or

(c) in any way, whether directly or indirectly, being concerned or taking part in the promotion, formation or management of a UK company.

(2) The regulations may provide that a person subject to foreign restrictions—

(a) is disqualified automatically by virtue of the regulations, or

(b) may be disqualified by order of the court on the application of the Secretary of State.

(3) The regulations may provide that the Secretary of State may accept an undertaking (a “disqualification undertaking”) from a person subject to foreign restrictions that he will not do anything which would be in breach of a disqualification under subsection (1).

(4) In this Part—

(a) a “person disqualified under this Part” is a person—

(i) disqualified as mentioned in subsection (2)(a) or (b), or

(ii) who has given and is subject to a disqualification undertaking;

(b) references to a breach of a disqualification include a breach of a disqualification undertaking.

(5) The regulations may provide for applications to the court by persons disqualified under this Part for permission to act in a way which would otherwise be in breach of the disqualification.

(6) The regulations must provide that a person ceases to be disqualified under this Part on his ceasing to be subject to foreign restrictions.

(7) Regulations under this section are subject to affirmative resolution procedure.

1185 Disqualification regulations: supplementary

(1) Regulations under section 1184 may make different provision for different cases and may in particular distinguish between cases by reference to—

(a) the conduct on the basis of which the person became subject to foreign restrictions;

(b) the nature of the foreign restrictions;

(c) the country or territory under whose law the foreign restrictions were imposed.

(2) Regulations under section 1184(2)(b) or (5) (provision for applications to the court)—

(a) must specify the grounds on which an application may be made;

(b) may specify factors to which the court shall have regard in determining an application.

(3) The regulations may, in particular, require the court to have regard to the following factors—

(a) whether the conduct on the basis of which the person became subject to foreign restrictions would, if done in relation to a UK company, have led a court to make a disqualification order on an application under the Company Directors Disqualification Act 1986 (c. 46) or the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4));

(b) in a case in which the conduct on the basis of which the person became subject to foreign restrictions would not be unlawful if done in relation to a UK company, the fact that the person acted unlawfully under foreign law;

(c) whether the person’s activities in relation to UK companies began after he became subject to foreign restrictions;

(d) whether the person’s activities (or proposed activities) in relation to UK companies are undertaken (or are proposed to be undertaken) outside the United Kingdom.

(4) Regulations under section 1184(3) (provision as to undertakings given to the Secretary of State) may include provision allowing the Secretary of State, in determining whether to accept an undertaking, to take into account matters other than criminal convictions notwithstanding that the person may be criminally liable in respect of those matters.

(5) Regulations under section 1184(5) (provision for application to court for permission to act) may include provision—

(a) entitling the Secretary of State to be represented at the hearing of the application, and

(b) as to the giving of evidence or the calling of witnesses by the Secretary of State at the hearing of the application.

1186 Offence of breach of disqualification

(1) Regulations under section 1184 may provide that a person disqualified under this Part who acts in breach of the disqualification commits an offence.

(2) The regulations may provide that a person guilty of such an offence is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

(3) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44), for “twelve months” in subsection (2)(b)(i) substitute “six months”.