Question

To ask the Secretary of State for Business, Innovation and Skills, what legislative provision exists to ensure that directors responsible for misconduct can be appropriately dealt with.

Where companies enter formal insolvency, there are powers under the Company Director’s Disqualification Act for the Secretary of State to apply to the court for the disqualification of directors who are found to be responsible for misconduct. Disqualification is a civil restriction which bars an individual from being appointed as a director, or being involved in the promotion, formation or management of a company for a period of between 2 and 15 years. Contravention of a disqualification is a criminal offence which may lead to prosecution and civil penalty.

That Act provides other grounds for disqualification of up to 15 years following misconduct in relation to companies not necessarily subject to insolvency proceedings, including disqualification on conviction of an indictable offence, for repeated breaches of company legislation and following investigations under the Companies Act.

In addition to disqualification, there are a number of criminal offences in the Insolvency Act for misconduct related to Insolvency, and other offences particularly in the Companies Act and Fraud Act.