Company Directors Disqualification Act
If you are a company director, then you need to know about the Company Directors’ Disqualification Act. This was approved on the 25th day of July 1986. This act consolidates enactments concerning the disqualification of individuals from acting as company directors or from being concerned with any affairs of the company.
This act possesses significant powers and it is needed to ban unfit individuals from holding office.
Company Directors’ Disqualification Act Info
Determining the right person to hold the title as company director can be hard. Before making any appointment, you should know about the Company Directors’ Disqualification Act. This was approved on the 25th day of July 1986. This act consolidates enactments concerning the disqualification of individuals from acting as company directors or from being concerned with any affairs of the company. This act possesses significant powers and it is needed to ban unfit individuals from holding office. There are key points considered before a certain person is disqualified from being a company director. It is vital that you know of these key points.
The points include the failure to submit timely accounts and annual returns, excessive remuneration, taking continuous credit, and trading even with the knowledge of insolvency. You need to be aware that the CDDA applies only to companies that are under liquidation. There is a mitigating effect from the voluntary arrangements but the directors need to be responsible in maximizing the creditor’s interests. According to the law, a certain director can be held liable for ‘willful failure’ of the company to manage PAYE on remuneration. The law also states that the property of the directors can be confiscated because of such failure.
The Consequences
For the unfit conduct of directors, the court can disqualify them for 2-15 years. Companies expect directors to be reasonable, fair, trustworthy, and competent. If the company director does not meet these standards, they can be disqualified by the law. If you are facing disqualification proceedings, it is advised that you seek immediate legal help. When mitigating factors are involved, you will have to defend yourself or else you will face the consequences. CDDA is serious business and you shouldn’t take it lightly. If you think that you’re not fit to become a director, it would be best not to hold office to avoid potential problems in the future.
You can find much relevant info about the Company Directors’ Disqualification Act. When a company faces liquidation, this is where the CDDA is applied. You will be held liable for the losses of the company and when proven guilty, your personal properties can be confiscated as well. Acting a company director is no joke. Once you are appointed, you need to ensure that you’re fit to perform all duties and responsibilities of a company director. When you are asked to submit reports, try to comply accordingly. You don’t meet any problems with the CDDA if you perform your duties properly and avoid abuse of authority.
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