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Explanatory Memorandum to Company Directors Disqualification (Northern Ireland) Order 2002

Commentary on Articles

Articles 1-4 are concerned with introductory provisions

Articles 5-8 are concerned with disqualification for general misconduct in

  • connection with companies

Articles 9-13 are concerned with disqualification for unfitness

Articles 14-17 are concerned with other cases of disqualification

Articles 18-19 are concerned with consequences of contravention

Articles 20-22 are concerned with supplementary provisions

Articles 23-26 are concerned with miscellaneous and general provisions

Article 3: Disqualification orders: general

This Article defines and sets out the circumstances in which a disqualification order may be made, provides that there is a maximum and minimum period of disqualification under such an order, establishes a time after the making of the order on which the period of disqualification begins and makes it clear that disqualification proceedings may go ahead independently of any separate criminal prosecution which might be brought.

Article 4: Disqualification undertakings: general

This Article makes provision for directors, whom the Department considers unfit, to consent to a period of disqualification without the need for court involvement by giving a disqualification undertaking to the Department. The period of disqualification would be for a maximum of fifteen years in cases where the company has become insolvent or on the basis of a report produced by an inspector who has been appointed to investigate its affairs.

Articles 5-11 and 13-22

These Articles restate with consequential amendments Articles 5 to 21 of the Companies (Northern Ireland) Order 1989.

Article 23: Admissibility in evidence of statements

This Article defines the basis on which statements may be used in evidence in proceedings under Articles 9 to 14, or 19 or Schedule 1 (i.e. civil proceedings) and prohibits their use in non-insolvency related criminal proceedings.

Paragraph (1) provides that a statement made for the purposes of Article 9 to 14 or 19 or Schedule 1 (i.e. civil proceedings) or for the purpose of any other provision of this Order under the Insolvency Order may be used in evidence in any proceedings against any person who either made or concurred in making it. It is immaterial whether the proceedings are under this Act or some other statutory provisions.

Paragraph (2) prohibits the use by the prosecution in criminal proceedings against a person of evidence obtained in statements under Article 9 to 14 or 19 or Schedule 1. It also prohibits the asking of questions by the prosecution in relation to the statement unless first introduced by the person making the statement.

Article 24: Interaction with the Insolvency Order

This Article provides that certain provisions of the Insolvency Order should be read as one with certain provisions of this Order and specifies that certain provisions of that Order bind the Crown.

Schedule 2: Transitional provisions and savings

Schedule 2 makes provision for the transition from the previous legislation to this Order. Paragraph 2 ensures continuity of the law following repeal of Part II and Schedules 1 to 3 of the Companies Order (NI) 1989. It provides that where those provisions had specified a period of time which is running before the Order comes into operation that period of time continues to run as if the Order had not come into operation. It also provides that any rights, priorities, reliefs under the Companies Order (NI) 1989 Part II and Schedules 1 to 3, obligations, requirements, powers, duties or exemptions dependent in any way on that specified period of time shall not be affected by the Order coming into effect.

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