PracticeConsultingDirector bannings jump on ‘fast-track’

Director bannings jump on 'fast-track'

A record number of directors were banned last year following a new 'fast-track' director disqualification process, according to recent government figures.

More than 900 directors were banned between March and December 2001, an increase of 24% over the same period last year following an amendment to insolvency laws, which came into effect in April.

The amendment, made under the Insolvency Act 2000, allows directors, deemed unfit by the secretary of state, to be banned without a court hearing through a ‘disqualification undertaking’.

It has the same legal effect as a disqualification order, which bans unfit directors from leading a company for periods of between two and fifteen years.

The sector with the highest number of disqualifications was construction and demolition, closely followed by computer services and textiles and manufacturing.

The majority of disqualifications occurred in London and the Southeast.

Competition and consumer affairs minister Melanie Johnson said: ‘Dodgy directors tarnish the image of the vast majority of legitimate businesses and often leave debts and misery in their wake.’

‘It is vital that the business community and consumers are protected from irresponsible, incompetent or rogue directors.’

‘These figures should serve as a warning to all of them – we will not let you get away with it.’

Links

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