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Insolvency Act 2000

Disqualification Undertakings

7.The present director disqualification regime was introduced by the Company Directors Disqualification Act 1986.  In particular, this allows the court to make a disqualification order against a director of an insolvent company whose conduct as a director of that company either on its own or when taken with his conduct of other companies is such as to make him in the view of the court unfit to be involved in the management of a company.  The application is made by the Secretary of State or the official receiver.  Over the past two years, about 2800 disqualification orders have been made under Section 6.

8.At present disqualification can only be achieved by means of court proceedings and there are delays in getting cases through the courts.  The power to accept undertakings which is to be conferred on the Secretary of State will mean that, where there is agreement, disqualification can be achieved administratively by the director giving an undertaking to the Secretary of State.  This will result in earlier disqualification for those who give an undertaking.  It will also save time.

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