DIRECTORS DISQUALIFICATION – WHAT IS
THIS?
Pursuant to the provisions of the
Company Directors Disqualification Act 1986
(“CDDA”) the Courts have the power
to disqualify individuals from inter alia
acting as a director of a limited company.
Such a disqualification order will also prevent
that individual from being involved in the
management, promotion or formation of that
company. The disqualification order made also
covers a number of other activities.
One
of the main reasons that an individual may
have for creating a limited company is that
that company trades with the benefit of
limited liability. What this means is that
should the company become insolvent then
only the assets of the limited company will
be used to liquidate the liabilities in
so far that they can, of that limited company.
An
individual trading either as a sole trader
or in his capacity as a member of a partnership
places all of his or her assets in jeopardy.
The sole trader and partnership assets,
the personal assets of the individual may
also be used to liquidate the debts incurred
by an individual or partnership as a result
of its trading activities.
Limited
liability is therefore on one view an insurance
policy in relation to the individual’s
personal assets.
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