Made | 17th December 2002 | ||
Coming into operation on days to be appointed under Article 1(2) |
1. | Title and commencement |
2. | Interpretation |
3. | Disqualification orders: general |
4. | Disqualification undertakings: general |
5. | Disqualification on conviction of offence punishable only on indictment or either on conviction on indictment or on summary conviction |
6. | Disqualification for persistent default under companies legislation |
7. | Disqualification for fraud, etc., in winding up |
8. | Disqualification on summary conviction of offence |
9. | Duty of High Court to disqualify unfit directors of insolvent companies |
10. | Disqualification order or undertaking; and reporting provisions |
11. | Disqualification after investigation of company |
12. | Variation etc. of disqualification undertaking |
13. | Matters for determining unfitness of directors |
14. | Participation in wrongful trading |
15. | Undischarged bankrupts |
16. | Failure to pay under administration order |
17. | Persons disqualified in Great Britain |
18. | Offences |
19. | Personal liability for company's debts where person acts while disqualified |
20. | Application for disqualification order |
21. | Application for leave under an order or undertaking |
22. | Register of disqualification orders and undertakings |
23. | Admissibility in evidence of statements |
24. | Interaction with the Insolvency Order |
25. | Application of Order to incorporated friendly societies |
26. | Transitional provisions, savings, amendments and repeals |
Schedule 1 | Matters for determining unfitness of directors |
Part I | Matters applicable in all cases |
Part II | Matters applicable where company has become insolvent |
Schedule 2 | Transitional provisions and savings |
Schedule 3 | Consequential amendments |
Schedule 4 | Repeals |
(3) Article 6 of the Insolvency Order (interpretation for Parts II to VII of that Order) applies as regards references to a company's insolvency and to its going into liquidation; and references to acting as an insolvency practitioner are to be read in accordance with Article 3 of that Order.
(4) Any reference to provisions, or a particular provision, of the Companies Orders or the Insolvency Order includes the corresponding provisions or provision of the former Companies Acts (as defined by Article 2(3) of the Companies Order, but including also that Order itself).
(5) Any expression for whose interpretation provision is made by Part I of the Companies Order (and not by paragraphs (2) to (4)) is to be construed in accordance with that provision.
(6) Any reference to acting as receiver -
3.
- (1) In the circumstances specified in this Order a court may, and under Article 9 shall, make against a person a disqualification order, that is to say an order that, for a period specified in the order -
(2) In each Article which gives to a court power or, as the case may be, imposes on it the duty to make a disqualification order there is specified the maximum (and, in Article 9, the minimum) period of disqualification which may or (as the case may be) must be imposed by means of the order and, unless the court otherwise orders, the period of disqualification so imposed shall begin at the end of the period of 21 days beginning with the date of the order.
(3) Where a disqualification order is made against a person who is already subject to such an order or to a disqualification undertaking, the periods specified in those orders or, as the case may be, in the order and the undertaking shall run concurrently.
(4) A disqualification order may be made on grounds which are or include matters other than criminal convictions, notwithstanding that the person in respect of whom it is to be made may be criminally liable in respect of those matters.
Disqualification undertakings: general
4.
- (1) In the circumstances specified in Articles 10 and 11 the Department may accept a disqualification undertaking, that is to say an undertaking by any person that, for a period specified in the undertaking, the person -
(2) The maximum period which may be specified in a disqualification undertaking is 15 years; and the minimum period which may be specified in a disqualification undertaking under Article 10 is two years.
(3) Where a disqualification undertaking by a person who is already subject to such an undertaking or to a disqualification order is accepted, the periods specified in those undertakings or (as the case may be) the undertaking and the order shall run concurrently.
(4) In determining whether to accept a disqualification undertaking by any person, the Department may take account of matters other than criminal convictions, notwithstanding that the person may be criminally liable in respect of those matters.
(3) The maximum period of disqualification under this Article is -
Disqualification for persistent default under companies legislation
6.
- (1) The High Court may make a disqualification order against a person where it appears to it that he has been persistently in default in relation to provisions of the companies legislation requiring any return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the registrar.
(2) On an application to the High Court for an order to be made under this Article, the fact that a person has been persistently in default in relation to such provisions as are mentioned in paragraph (1) may (without prejudice to its proof in any other manner) be conclusively proved by showing that in the 5 years ending with the date of the application he has been adjudged guilty (whether or not on the same occasion) of 3 or more defaults in relation to those provisions.
(3) A person is to be treated under paragraph (2) as being adjudged guilty of a default in relation to any such provision if -
in respect of any such contravention of that provision (whether on his own part or on the part of any company).
(4) The maximum period of disqualification under this Article is 5 years.
Disqualification for fraud, etc., in winding up
7.
- (1) The High Court may make a disqualification order against a person if, in the course of the winding up of a company, it appears that he -
(2) In this Article "officer" includes a shadow director.
(3) The maximum period of disqualification under this Article is 15 years.
Disqualification on summary conviction of offence
8.
- (1) An offence counting for the purposes of this Article is one of which a person is convicted (either on indictment or on summary conviction) in consequence of a contravention of any provision of the companies legislation requiring a return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the registrar (whether the contravention is on the person's own part or on the part of any company).
(2) Where a person is convicted by a court of summary jurisdiction of an offence mentioned in paragraph (1), the court by which he is convicted, or any other court of summary jurisdiction acting for the same petty sessions district, may make a disqualification order against him if the circumstances specified in paragraph (3) are present.
(3) Those circumstances are that, during the 5 years ending with the date of the conviction, the person has had made against him, or has been convicted of, in total not less than 3 default orders and offences counting for the purposes of this Article and those offences may include that of which he is convicted as mentioned in paragraph (2) and any other offence of which he is convicted on the same occasion.
(4) For the purposes of this Article "default order" means the same as in Article 6(3)(b).
(5) The maximum period of disqualification under this Article is 5 years.
(2) For the purposes of this Article and Article 10, a company becomes insolvent if -
and references to a person's conduct as a director of any company or companies include, where that company or any of those companies has become insolvent, that person's conduct in relation to any matter connected with or arising out of the insolvency of that company.
(3) Under this Article the minimum period of disqualification is 2 years, and the maximum period is 15 years.
Disqualification order or undertaking; and reporting provisions
10.
- (1) If it appears to the Department that it is expedient in the public interest that a disqualification order under Article 9 should be made against any person, an application for the making of such an order against that person may be made -
(2) Except with the leave of the High Court, an application for the making under Article 9 of a disqualification order against any person shall not be made after the expiration of 2 years from the day on which the company of which that person is or has been a director became insolvent.
(3) If it appears to the Department that the conditions mentioned in Article 9(1) are satisfied as respects any person who has offered to give the Department a disqualification undertaking, the Department may accept the undertaking if it appears to the Department that it is expedient in the public interest that the Department should do so (instead of applying, or proceeding with an application, for a disqualification order).
(4) If it appears to the office-holder responsible under this Article, that is to say -
that the conditions mentioned in Article 9(1) are satisfied as respects a person who is or has been a director of that company, the office-holder shall forthwith report the matter to the Department.
(5) The Department or the official receiver may require the liquidator, administrator or administrative receiver of a company, or the former liquidator, administrator or administrative receiver of a company -
as the Department or the official receiver may reasonably require for the purpose of determining whether to exercise, or of exercising, any function under this Article.
Disqualification after investigation of company
11.
- (1) If it appears to the Department from investigative material that it is expedient in the public interest that a disqualification order should be made against a person who is, or has been, a director or shadow director of a company, the Department may apply to the High Court for such an order.
(2) "Investigative material" means -
(a) information or documents obtained under -
(3) Where it appears to the Department from such report, information or documents that, in the case of a person who has offered to give the Department a disqualification undertaking -
the Department may accept the undertaking.
(4) The High Court may make a disqualification order against a person where, on an application under this Article, it is satisfied that his conduct in relation to the company makes him unfit to be concerned in the management of a company.
(5) The maximum period of disqualification under this Article is 15 years.
Variation etc. of disqualification undertaking
12.
- (1) The High Court may, on the application of a person who is subject to a disqualification undertaking -
(2) On the hearing of an application under paragraph (1), the Department shall appear and call the attention of the Court to any matters which seem to the Department to be relevant, and may give evidence or call witnesses.
13.
- (1) Where it falls to the High Court to determine whether a person's conduct as a director of any particular company or companies makes him unfit to be concerned in the management of a company, the Court shall, as respects his conduct as a director of that company or, as the case may be, each of those companies, have regard in particular -
and references in that Schedule to the director and the company are to be read accordingly.
(2) In determining whether it may accept a disqualification undertaking from any person the Department shall, as respects the person's conduct as a director of any company concerned, have regard in particular -
and references in that Schedule to the director and the company are to be read accordingly.
(3) Article 9(2) applies for the purposes of this Article and Schedule 1 as it applies for the purposes of Articles 9 and 10; and in this Article and that Schedule "director" includes a shadow director.
(4) Subject to paragraph (5), any reference in Schedule 1 to a statutory provision contained in the Companies Order or the Insolvency Order includes, in relation to any time before the coming into operation of that statutory provision, the corresponding statutory provision in force at that time.
(5) The Department may by order subject to affirmative resolution modify any of the provisions of Schedule 1; and such an order may contain such transitional provisions as may appear to the Department necessary or expedient.
Offences
18.
If a person acts in contravention of a disqualification order or disqualification undertaking, or in contravention of Article 15, 16(2) or 17, he shall be guilty of an offence and shall be liable -
Personal liability for company's debts where person acts while disqualified
19.
- (1) A person is personally responsible for all the relevant debts of a company if at any time -
(2) Where a person is personally responsible under this Article for the relevant debts of a company, he is jointly and severally liable in respect of those debts with the company and any other person who, whether under this Article or otherwise, is so liable.
(3) For the purposes of this Article the relevant debts of a company are -
(4) For the purposes of this Article, a person is involved in the management of a company if he is a director of the company or if he is concerned, whether directly or indirectly, or takes part, in the management of the company.
(5) For the purposes of this Article a person who, as a person involved in the management of a company, has at any time acted on instructions given without the leave of the High Court by a person whom he knew at that time to be -
is presumed, unless the contrary is shown, to have been willing at any time thereafter to act on any instructions given that person.
the clerk of the court shall furnish to the Department and to the Secretary of State such particulars as may be prescribed and regulations may prescribe the time within which, and the form and manner in which, such particulars are to be furnished.
(2) The Department shall, from the particulars so furnished continue to maintain the register of disqualification orders, and of cases in which leave has been granted as mentioned in paragraph (1), which was set up by it under Article 309 of the Companies Order.
(3) The Department shall include in the register such particulars as the Department considers appropriate of disqualification undertakings accepted by it under Article 10 or 11 and of cases in which leave has been granted as mentioned in paragraph (1)(d).
(4) When an order or undertaking of which entry is made in the register ceases to be in force, the Department shall delete the entry from the register and all particulars relating to it which have been furnished to the Department under this Article or any previous corresponding provision and, in the case of a disqualification undertaking, any other particulars the Department has included in the register.
(5) The register shall be open to inspection on payment of such fee as may be prescribed.
(6) The Department may furnish to the Secretary of State such particulars as the Department considers appropriate of disqualification undertakings accepted by it under Article 10 or 11.
(7) Regulations under this Article may extend the preceding provisions of this Article, to such extent and with such modifications as may be specified in the regulations, to disqualification orders made and disqualification undertakings accepted under the Company Directors Disqualification Act 1986 (c. 46).
by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
(3) Paragraph (2) applies to any offence other than -
(b) an offence which is -
(c) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (NI 19) (false statements made otherwise than on oath).
(4) Regulations under paragraph (3)(a)(ii) shall after being made be laid before the Assembly.
Interaction with the Insolvency Order
24.
- (1) Articles 4, 9 to 14, 18, 19 and 23 and Schedule 1, and Articles 3 and 21 as they apply for the purposes of those provisions, are deemed included in Parts II to VII of the Insolvency Order for the purposes of the following Articles of that Order -
(2) Article 378 of that Order (Crown application) applies to Articles 4, 9 to 14, 18, 19 and 23 and Schedule 1, and Articles 3 and 21 as they apply for the purposes of those provisions, as it does to the provisions of that Order which are there mentioned.
Application of Order to incorporated friendly societies
25.
- (1) This Order applies to incorporated friendly societies as it applies to companies.
(2) References in this Order to a company, or to a director or an officer of a company include, respectively, references to an incorporated friendly society within the meaning of the Friendly Societies Act 1992 (c. 40) or to a member of the committee of management or officer, within the meaning of that Act, of an incorporated friendly society.
(3) In relation to an incorporated friendly society every reference to a shadow director shall be omitted.
(4) In the application of Schedule 1 to the members of the committee of management of an incorporated friendly society, references to provisions of the Insolvency Order or the Companies Order include references to the corresponding provisions of the Friendly Societies Act 1992.
Transitional provisions, savings, amendments and repeals
26.
- (1) The transitional provisions and savings in Schedule 2 shall have effect for the purposes of this Order.
(2) The statutory provisions specified in Schedule 3 shall have effect subject to the amendments specified there, being amendments consequential on the provisions of this Order.
(3) The Department may by order, subject to negative resolution, make -
which it considers necessary or expedient for the purposes of this Order.
(4) An order under paragraph (3) may -
(5) Subject to paragraph (1) and any transitory, transitional or saving provision made under paragraph (3), the statutory provisions specified in Schedule 4 are hereby repealed to the extent specified in column 2 of that Schedule.
A. K. Galloway
Clerk of the Privy Council
(2) Until the day appointed by order under Article 1 of the Companies (No. 2) (Northern Ireland) Order 1990 (NI 10) for the coming into operation of paragraph 2 of Schedule 2 to that Order, sub-paragraph (l) shall have effect as if for paragraph (g) there were substituted -
5.
The extent of the director's responsibility for any failure by the directors of the company to comply with -
6.
In the application of this Part in relation to any person who is a director of an investment company with variable capital, any reference to a provision of the Companies Order shall be taken to be a reference to the corresponding provision of any regulations for the time being having effect under the Open-Ended Investment Companies Act (Northern Ireland) 2002 or of any rules made under such regulations by the Financial Services Authority.
7.
In the application of this Schedule to the directors of a building society, references to provisions of this Order or of the Companies Order other than provisions which apply to building societies or their directors in any event, whether by virtue of this Order or the Building Societies Act 1986, shall be construed as references to the corresponding provisions (if any) of the Building Societies Act 1986
and any rights, priorities, liabilities, reliefs, obligations, requirements, powers, duties or exemptions dependent on the beginning, duration or end of such a period as above mentioned shall be under this Order as they were or would have been under that repealed provision.
3.
The provision of this Schedule shall have effect without prejudice to sections 28 and 29 of the Interpretation Act (Northern Ireland) 1954 (c. 33).
4.
In Article 434(1) (inspector's report to be evidence) for "Article 11 of the Companies (Northern Ireland) Order 1989" substitute "Article 11 of the Company Directors Disqualification (Northern Ireland) Order 2002".
5.
In Article 442(1)(b) (provision for security of information obtained) for "Articles 9, 10 or 11 of the Companies (Northern Ireland) Order 1989" substitute "Article 9, 10 or 11 of the Company Directors Disqualification (Northern Ireland) Order 2002".
7.
In Schedule 5 (provisions capable of inclusion in company insolvency rules)
8.
In Article 73(6) (initial Government holding in the companies), for "Part II of the Companies (Northern Ireland) Order 1989" substitute "the Company Directors Disqualification (Northern Ireland) Order 2002".
Short Title | Extent of repeal |
The Companies (Northern Ireland) Order 1989 (NI 18). |
Part II. Schedules 1 to 3. |
The Companies (Northern Ireland) Order 1990 (NI 5). | In Part II of Schedule 10, paragraph 31. |
The Companies (No. 2) (Northern Ireland) Order 1990 (NI 10). |
Articles 26 and 74(4). In Schedule 2, paragraph 2. |
The Criminal Justice Act 1993 (c. 36). | In Part II of Schedule 5, paragraph 21. |
The Deregulation and Contracting Out Act 1994 (c. 40). | In Schedule 11, paragraph 10. |
The Youth Justice and Criminal Evidence Act 1999 (c. 23). |
In Schedule 3, paragraph 22. In Schedule 4, paragraph 18. |
Crown copyright 2002
Prepared 9 January 2003