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.

We can help you with Directors Disqualifications call our HELPLINE 0845 430 7676

Filed under: INSOLVENCY

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