Legalize / United Kingdom / Public General Act

Company Directors Disqualification Act 1986

Type Public General Act

Publication 1986-07-25

Last updated 2024-02-22

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

[^key-85aa213d84b9d5bc52a4e7af76308f49]: S. 12C(3A) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(7)(b) (with Sch. 13 para. 4(2))

[^key-9a2560399c762625a52578a0628787f2]: Words in s. 12C(4) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(7)(c) (with Sch. 13 para. 4(2))

[^key-40d12d677e358a492fab8a724155374a]: S. 16(4)(ba) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(8) (with Sch. 13 para. 4(2))

[^key-e2d5d71426e4b55e36d4bb05bf1e893d]: S. 17(3ZC) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(9)(a) (with Sch. 13 para. 4(2))

[^key-79f7a15623380bcfa6cae59228b35a75]: S. 17(5A)(5B) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(9)(b) (with Sch. 13 para. 4(2))

[^key-dc0e0870ca439ed20b883c51e7e9be0e]: S. 18(2A)(aa) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(10) (with Sch. 13 para. 4(2))

[^key-e41b10b79a3c8ac8365ec4648ac8296a]: Words in s. 20(1) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(11)(a) (with Sch. 13 para. 4(2))

[^key-622920f212318e60287be924df7bfb4e]: Word in s. 20(3)(c) omitted (22.2.2024) by virtue of Finance Act 2024 (c. 3), Sch. 13 para. 2(11)(b)(i) (with Sch. 13 para. 4(2))

[^key-d853b3a5d78c7a48e9ca6c14947c3a9d]: S. 20(3)(e) and word inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(11)(b)(ii) (with Sch. 13 para. 4(2))

[^key-04a4e957a71779bb0c24680ad463bc8e]: S. 20(5) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(11)(c) (with Sch. 13 para. 4(2))

[^M_F_534efc60-f44b-45da-ced1-24dfc28853fc]: Word in s. 21 heading inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(12)(a) (with Sch. 13 para. 4(2))

[^M_F_1f8d763d-a743-433d-8741-c39800ca7eb3]: S. 21(5) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(12)(b) (with Sch. 13 para. 4(2))

[^M_F_eb32b1ea-a34a-4088-e3ec-bc5183bfb508]: S. 22(2B) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(13) (with Sch. 13 para. 4(2))

[^M_F_dff5f17b-8db9-43c3-db14-1bdd464b840b]: Words in s. 22H(1)(a) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(14)(a) (with Sch. 13 para. 4(2))

[^M_F_bd624851-204d-4c79-c8a3-27b62093ed05]: S. 22H(1)(aa) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(14)(b) (with Sch. 13 para. 4(2))

[^M_F_e514223c-c56a-460f-9775-2272b60f07f9]: Words in s. 22H(4)(j) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(14)(c) (with Sch. 13 para. 4(2))

[^M_F_e1722d48-aabe-44ef-ffd3-27ca5f1a9cc1]: S. 22H(4)(k) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(14)(d) (with Sch. 13 para. 4(2))

[^M_F_58e26ef5-e113-4965-82ab-e73fd3adcf72]: S. 24(3) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 2(15) (with Sch. 13 para. 4(2))

[^M_C_de21e950-b1bc-44ed-e02c-b5b6bab5af1e]: S. 8 applied (with modifications) (22.2.2024) by Finance Act 2024 (c. 3), Sch. 13 para. 5(1) (with Sch. 13 para. 5(3))

Disqualification for fraud, etc., in winding up.

Legal professional privilege

Disqualification for certain convictions abroad

Application of Act to charitable incorporated organisations

22F

(1) This Act applies to charitable incorporated organisations (“CIOs”) as it applies to companies.

(2) Accordingly, in this Act—

(a) references to a company are to be read as including references to a CIO;

(b) references to a director or an officer of a company are to be read as including references to a charity trustee of a CIO; and

(3) As they apply in relation to CIOs, the provisions of this Act have effect with the following modifications—

(a) in section 2(1), the reference to striking off is to be read as including a reference to dissolution;

(b) in section 4(1)(a), the reference to an offence under section 993 of the Companies Act 2006 is to be read as including a reference to an offence under regulation 60 of the Charitable Incorporated Organisations (General) Regulations 2012(fraudulent trading);

(ba) sections 6(1)(a)(ii) and (3)(d) and 7(2)(b) are to be disregarded;

(bb) references in sections 7(4)(a), 8ZB(2) and 15A(3)(b) to a company which has been dissolved without becoming insolvent are to be disregarded;

(d) references to any of sections 9A to 9E are to be disregarded;

(da) section 11A is to be disregarded;

(e) references to a shadow director are to be disregarded.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In this section “charity trustees” has the meaning given by section 177 of the Charities Act 2011.

22E

(1) In this section “registered society” has the same meaning as in the Co-operative and Community Benefit Societies Act 2014 (“the 2014 Act”).

(2) This Act applies to registered societies as it applies to companies.

(3) Accordingly, in this Act—

(a) references to a company include a registered society, and

(b) references to a director or an officer of a company include a member of the committee or an officer of a registered society.

In paragraph (b) “committee” and “officer” have the same meaning as in the 2014 Act: see section 149 of that Act.

(4) As they apply in relation to registered societies, the provisions of this Act have effect with the following modifications—

(a) in section 2(1) (disqualification on conviction of indictable offence), the reference to striking off includes cancellation of the registration of a society under the 2014 Act;

(b) in section 3 (disqualification for persistent breaches) and section 5 (disqualification on summary conviction), references to the companies legislation shall be read as references to the legislation relating to registered societies;

(d) references to the registrar shall be read as references to the Financial Conduct Authority;

(e) references to a shadow director shall be disregarded

(f) sections 6(1)(a)(ii) and (3)(d), 7(2)(b) and 8ZA to 8ZE , 8ZA to 8ZE and 11A are to be disregarded;

(g) references in sections 7(4)(a) and 15A(3)(b) to a company which has been dissolved without becoming insolvent are to be disregarded.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The legislation relating to registered societies” means the Credit Unions Act 1979 and the Co-operative and Community Benefit Societies Act 2014.

5A

(1) If it appears to the Secretary of State that it is expedient in the public interest that a disqualification order under this section should be made against a person, the Secretary of State may apply to the court for such an order.

(2) The court may, on an application under subsection (1), make a disqualification order against a person who has been convicted of a relevant foreign offence.

(3) A “relevant foreign offence” is an offence committed outside Great Britain—

(a) in connection with—

(i) the promotion, formation, management, liquidation or striking off of a company (or any similar procedure),

(ii) the receivership of a company's property (or any similar procedure), or

(iii) a person being an administrative receiver of a company (or holding a similar position), and

(b) which corresponds to an indictable offence under the law of England and Wales or (as the case may be) an indictable offence under the law of Scotland.

(4) Where it appears to the Secretary of State that, in the case of a person who has offered to give a disqualification undertaking—

(a) the person has been convicted of a relevant foreign offence, and

(b) it is expedient in the public interest that the Secretary of State should accept the undertaking (instead of applying, or proceeding with an application, for a disqualification order),

the Secretary of State may accept the undertaking.

(5) In this section—

“company” includes an overseas company;

“the court” means the High Court or, in Scotland, the Court of Session.

(6) The maximum period of disqualification under an order under this section is 15 years.

7A

(1) The office-holder in respect of a company which is insolvent must prepare a report (a “conduct report”) about the conduct of each person who was a director of the company—

(a) on the insolvency date, or

(b) at any time during the period of 3 years ending with that date.

(2) For the purposes of this section a company is insolvent if—

(a) the company is in liquidation and at the time it went into liquidation its assets were insufficient for the payment of its debts and other liabilities and the expenses of the winding up,

(b) the company has entered administration, or

and subsection (1A) of section 6 applies for the purposes of this section as it applies for the purpose of that section.

(3) A conduct report must, in relation to each person, describe any conduct of the person which may assist the Secretary of State in deciding whether to exercise the power under section 7(1) or (2A) in relation to the person.

(4) The office-holder must send the conduct report to the Secretary of State before the end of—

(a) the period of 3 months beginning with the insolvency date, or

(b) such other longer period as the Secretary of State considers appropriate in the particular circumstances.

(5) If new information comes to the attention of an office-holder, the office-holder must send that information to the Secretary of State as soon as reasonably practicable.

(6) “New information” is information which an office-holder considers should have been included in a conduct report prepared in relation to the company, or would have been so included had it been available before the report was sent.

(7) If there is more than one office-holder in respect of a company at any particular time (because the company is insolvent by virtue of falling within more than one paragraph of subsection (2) at that time), subsection (1) applies only to the first of the office-holders to be appointed.

(8) In the case of a company which is at different times insolvent by virtue of falling within one or more different paragraphs of subsection (2)—

(a) the references in subsection (1) to the insolvency date are to be read as references to the first such date during the period in which the company is insolvent, and

(b) subsection (1) does not apply to an office-holder if at any time during the period in which the company is insolvent a conduct report has already been prepared and sent to the Secretary of State.

(9) The “office-holder” in respect of a company which is insolvent is—

(a) in the case of a company being wound up by the court in England and Wales, the official receiver;

(b) in the case of a company being wound up otherwise, the liquidator;

(d) in the case of a company of which there is an administrative receiver, the receiver.

(10) The “insolvency date”—

(a) in the case of a company being wound up by the court, means the date on which the court makes the winding-up order (see section 125 of the Insolvency Act 1986);

(b) in the case of a company being wound up by way of a members' voluntary winding up, means the date on which the liquidator forms the opinion that the company will be unable to pay its debts in full (together with interest at the official rate) within the period stated in the directors' declaration of solvency under section 89 of the Insolvency Act 1986;

(c) in the case of a company being wound up by way of a creditors' voluntary winding up where no such declaration under section 89 of that Act has been made, means the date of the passing of the resolution for voluntary winding up;

(d) in the case of a company which has entered administration, means the date the company did so;

(e) in the case of a company in respect of which an administrative receiver has been appointed, means the date of that appointment.

(11) For the purposes of subsection (10)(e), any appointment of an administrative receiver to replace an administrative receiver who has died or vacated office pursuant to section 45 of the Insolvency Act 1986 is to be ignored.

(12) In this section—

“court” has the same meaning as in section 6;

“director” includes a shadow director.

Persons instructing unfit directors

8ZA

(1) The court may make a disqualification order against a person (“P”) if, on an application under section 8ZB, it is satisfied—

(a) either—

(i) that a disqualification order under section 6 has been made against a person who is or has been a director (but not a shadow director) of a company, or

(ii) that the Secretary of State has accepted a disqualification undertaking from such a person under section 7(2A), and

(b) that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2) For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a) for which the main transgressor is subject to the order made under section 6, or

(b) in relation to which the undertaking was accepted from the main transgressor under section 7(2A),

was the result of the main transgressor acting in accordance with P's directions or instructions.

(3) But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

(4) Under this section the minimum period of disqualification is 2 years and the maximum period is 15 years.

(5) In this section and section 8ZB “the court” has the same meaning as in section 6; and subsection (3B) of section 6 applies in relation to proceedings mentioned in subsection (6) below as it applies in relation to proceedings mentioned in section 6(3B)(a) and (b).

(6) The proceedings are proceedings—

(a) for or in connection with a disqualification order under this section, or

(b) in connection with a disqualification undertaking accepted under section 8ZC.

8ZB

(1) If it appears to the Secretary of State that it is expedient in the public interest that a disqualification order should be made against a person under section 8ZA, the Secretary of State may—

(a) make an application to the court for such an order, or

(b) in a case where an application for an order under section 6 against the main transgressor has been made by the official receiver, direct the official receiver to make such an application.

(2) Except with the leave of the court, an application for a disqualification order under section 8ZA must not be made after the end of the period of 3 years beginning with the day on which the company in question became insolvent (within the meaning given by section 6(2)) or was dissolved without becoming insolvent.

(3) Subsection (4) of section 7 applies for the purposes of this section as it applies for the purposes of that section.

8ZC

(1) If it appears to the Secretary of State that it is expedient in the public interest to do so, the Secretary of State may accept a disqualification undertaking from a person (“P”) if—

(a) any of the following is the case—

(i) a disqualification order under section 6 has been made against a person who is or has been a director (but not a shadow director) of a company,

(ii) the Secretary of State has accepted a disqualification undertaking from such a person under section 7(2A), or

(iii) it appears to the Secretary of State that such an undertaking could be accepted from such a person (if one were offered), and

(b) it appears to the Secretary of State that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2) For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a) for which the main transgressor is subject to the disqualification order made under section 6,

(b) in relation to which the disqualification undertaking was accepted from the main transgressor under section 7(2A), or

was the result of the main transgressor acting in accordance with P's directions or instructions.

(3) But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

(4) Subsection (4) of section 7 applies for the purposes of this section as it applies for the purposes of that section.

8ZD

(1) The court may make a disqualification order against a person (“P”) if, on an application under this section, it is satisfied—

(a) either—

(i) that a disqualification order under section 8 has been made against a person who is or has been a director (but not a shadow director) of a company, or

(ii) that the Secretary of State has accepted a disqualification undertaking from such a person under section 8(2A), and

(b) that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2) The Secretary of State may make an application to the court for a disqualification order against P under this section if it appears to the Secretary of State that it is expedient in the public interest for such an order to be made.

(3) For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a) for which the main transgressor is subject to the order made under section 8, or

(b) in relation to which the undertaking was accepted from the main transgressor under section 8(2A),

was the result of the main transgressor acting in accordance with P's directions or instructions.

(4) But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

(5) Under this section the maximum period of disqualification is 15 years.

(6) In this section “the court” means the High Court or, in Scotland, the Court of Session.

8ZE

(1) If it appears to the Secretary of State that it is expedient in the public interest to do so, the Secretary of State may accept a disqualification undertaking from a person (“P”) if—

(a) any of the following is the case—

(i) a disqualification order under section 8 has been made against a person who is or has been a director (but not a shadow director) of a company,

(ii) the Secretary of State has accepted a disqualification undertaking from such a person under section 8(2A), or

(iii) it appears to the Secretary of State that such an undertaking could be accepted from such a person (if one were offered), and

(b) it appears to the Secretary of State that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2) For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a) for which the main transgressor is subject to the disqualification order made under section 8,

(b) in relation to which the disqualification undertaking was accepted from the main transgressor under section 8(2A), or

was the result of the main transgressor acting in accordance with P's directions or instructions.

(3) But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

Further provision about disqualification undertakings

12C

(1) This section applies where a court must determine—

(a) whether a person's conduct as a director of one or more companies or overseas companies makes the person unfit to be concerned in the management of a company;

(b) whether to exercise any discretion it has to make a disqualification order under any of sections 2 to 4, 5A, 8 , 8ZG or 10;

(c) where the court has decided to make a disqualification order under any of those sections or is required to make an order under section 6 or 8ZF, what the period of disqualification should be.

(2) But this section does not apply where the court in question is one mentioned in section 2(2)(b) or (c).

(3) This section also applies where the Secretary of State must determine—

(a) whether a person's conduct as a director of one or more companies or overseas companies makes the person unfit to be concerned in the management of a company;

(b) whether to exercise any discretion the Secretary of State has to accept a disqualification undertaking under section 5A, 7 or 8.

(3A) This section also applies where an officer of Revenue and Customs must determine—

(a) whether a person's conduct as a director of one or more companies or overseas companies makes the person unfit to be concerned in the management of a company;

(b) whether to exercise any discretion the officer has to accept a disqualification undertaking under section 8ZF or 8ZG.

(4) In making any such determination in relation to a person, the court or the Secretary of State or the officer (as the case may be) must—

(a) in every case, have regard in particular to the matters set out in paragraphs 1 to 4 of Schedule 1;

(b) in a case where the person concerned is or has been a director of a company or overseas company, also have regard in particular to the matters set out in paragraphs 5 to 7 of that Schedule.

(5) In this section “director” includes a shadow director.

(6) Subsection (1A) of section 6 applies for the purposes of this section as it applies for the purposes of that section.

(7) The Secretary of State may by order modify Schedule 1; and such an order may contain such transitional provision as may appear to the Secretary of State to be necessary or expedient.

(8) The power to make an order under this section is exercisable by statutory instrument.

(9) An order under this section may not be made unless a draft of the instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.

Compensation orders and undertakings

15A

(1) The court may make a compensation order against a person on the application of the Secretary of State if it is satisfied that the conditions mentioned in subsection (3) are met.

(2) If it appears to the Secretary of State that the conditions mentioned in subsection (3) are met in respect of a person who has offered to give the Secretary of State a compensation undertaking, the Secretary of State may accept the undertaking instead of applying, or proceeding with an application, for a compensation order.

(3) The conditions are that—

(a) the person is subject to a disqualification order or disqualification undertaking under this Act, and

(b) conduct for which the person is subject to the order or undertaking has caused loss to one or more creditors of an insolvent company , or a company which has been dissolved without becoming insolvent, of which the person has at any time been a director.

(4) An “insolvent company” is a company that is or has been insolvent and a company becomes insolvent if—

(a) the company goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up,

(b) the company enters administration, or

(5) The Secretary of State may apply for a compensation order at any time before the end of the period of two years beginning with the date on which the disqualification order referred to in paragraph (a) of subsection (3) was made, or the disqualification undertaking referred to in that paragraph was accepted.

(6) In the case of a person subject to a disqualification order under section 8ZA or 8ZD, or a disqualification undertaking under section 8ZC or 8ZE, the reference in subsection (3)(b) to conduct is a reference to the conduct of the main transgressor in relation to which the person has exercised the requisite amount of influence.

(7) In this section and sections 15B and 15C “the court” means—

(a) in a case where a disqualification order has been made, the court that made the order,

(b) in any other case, the High Court or, in Scotland, the Court of Session.

15B

(1) A compensation order is an order requiring the person against whom it is made to pay an amount specified in the order—

(a) to the Secretary of State for the benefit of—

(i) a creditor or creditors specified in the order;

(ii) a class or classes of creditor so specified;

(b) as a contribution to the assets of a company so specified.

(2) A compensation undertaking is an undertaking to pay an amount specified in the undertaking—

(a) to the Secretary of State for the benefit of—

(i) a creditor or creditors specified in the undertaking;

(ii) a class or classes of creditor so specified;

(b) as a contribution to the assets of a company so specified.

(3) When specifying an amount the court (in the case of an order) and the Secretary of State (in the case of an undertaking) must in particular have regard to—

(a) the amount of the loss caused;

(b) the nature of the conduct mentioned in section 15A(3)(b);

(c) whether the person has made any other financial contribution in recompense for the conduct (whether under a statutory provision or otherwise).

(4) An amount payable by virtue of subsection (2) under a compensation undertaking is recoverable as if payable under a court order.

(5) An amount payable under a compensation order or compensation undertaking is provable as a bankruptcy debt.

15C

(1) The court may, on the application of a person who is subject to a compensation undertaking—

(a) reduce the amount payable under the undertaking, or

(b) provide for the undertaking not to have effect.

(2) On the hearing of an application under subsection (1), the Secretary of State must appear and call the attention of the court to any matters which the Secretary of State considers relevant, and may give evidence or call witnesses.

Matters to be taken into account in all cases

Additional matters to be taken into account where person is or has been a director

Interpretation

22H

(1) In this section—

(a) so far as this section extends to England and Wales and Scotland, “protected cell company” means a protected cell company incorporated under Part 4 of the Risk Transformation Regulations 2017 which has its registered office in England and Wales (or Wales) or Scotland; and

(aa) so far as this section extends to Northern Ireland, “protected cell company” means a protected cell company incorporated under Part 4 of the Risk Transformation Regulations 2017 which has its registered office in Northern Ireland;

(b) a reference to a part of a protected cell company is a reference to the core or a cell of the protected cell company (see regulations 42 and 43 of the Risk Transformation Regulations 2017).

(2) This Act applies to protected cell companies as it applies to companies.

(3) Accordingly, in this Act, references to a company are to be read as including references to a protected cell company.

(4) As they apply in relation to protected cell companies, the provisions of this Act have effect with the following modifications—

(za) sections 6(1)(a)(ii) and (3)(d) and 7(2)(b) , 7(2)(b) and 11A are to be disregarded;

(zb) references in sections 7(4)(a), 8ZB(2) and 15A(3)(b) to a company which has been dissolved without becoming insolvent are to be disregarded;

(a) references to the administration, insolvency, liquidation or winding up of a company are to be read as references to the administration, insolvency, liquidation or winding up of a part of a protected cell company;

(b) references to striking off are to be read as including references to dissolution;

(c) references to a director of a company which is or has been insolvent are to be read as references to the director of a protected cell company, a part of which is or has been insolvent;

(d) references to a director of a company which is being or has been wound up are to be read as references to the director of a protected cell company, a part of which is being or has been wound up;

(e) references to the court with jurisdiction to wind up a company are to be read as references to the court with jurisdiction to wind up the parts of a protected cell company;

(f) references to the companies legislation are to be read as references to Part 4 of, and Schedules 1 to 3 to, the Risk Transformation Regulations 2017;

(g) references to the Insolvency Act 1986 are to be read as references to that Act as applied by Part 4 of, and Schedules 1 to 3 to, the Risk Transformation Regulations 2017;

(h) references to section 452 and 456 of the Companies Act 2006 are to be read as references to those sections as applied by regulation 163 of the Risk Transformation Regulations 2017;

(i) references to the registrar of companies are to be read as references to the Financial Conduct Authority; and

(j) so far as this section extends to England and Wales and Scotland, references to an overseas company include references to a protected cell company incorporated under the Risk Transformation Regulations 2017 which has its registered office in Northern Ireland;

(k) so far as this section extends to Northern Ireland, references to an overseas company include references to a protected cell company incorporated under the Risk Transformation Regulations 2017 which has its registered office in England and Wales (or Wales) or Scotland.

(5) Where two or more parts of a protected cell company are or have been insolvent, then sections 6 to 7A and 8ZA to 8ZC apply in relation to each part separately.

(6) A contribution to the assets of a protected cell company given in accordance with a compensation order under section 15A(1) or a compensation undertaking under section 15A(2) is to be held by the protected cell company on behalf of the part of the protected cell company specified in the order or undertaking.

22G

(1) This Act applies to further education bodies as it applies to companies.

(2) Accordingly, in this Act—

(a) references to a company are to be read as including references to a further education body;

(b) references to a director or an officer of a company are to be read as including references to a member of a further education body;

(c) any reference to the Insolvency Act 1986 is to be read as including a reference to that Act as it applies to further education bodies.

(3) As they apply in relation to further education bodies, the provisions of this Act have effect with the following modifications—

(a) in section 2(1), the reference to striking off is to be read as including a reference to dissolution;

(aa) sections 6(1)(a)(ii) and (3)(d) and 7(2)(b) are to be disregarded;

(ab) references in sections 7(4)(a), 8ZB(2) and 15A(3)(b) to a company which has been dissolved without becoming insolvent are to be disregarded;

(b) sections 9A to 9E are to be disregarded;

(d) section 11A is to be disregarded.

(4) In this section—

“further education body” means—a further education corporation, ora sixth form college corporation;

“further education corporation” means a body corporate that—is established under section 15 or 16 of the Further and Higher Education Act 1992, orhas become a further education corporation by virtue of section 33D or 47 of that Act;

“sixth form college corporation” means a body corporate—designated as a sixth form college corporation under section 33A or 33B of the Further and Higher Education Act 1992, orestablished under section 33C of that Act.

Designated persons under sanctions legislation

11A

(1) It is an offence for a person who is subject to director disqualification sanctions to act as a director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company (but see subsection (2)).

(2) Subsection (1) does not apply—

(a) to the extent that an exception from subsection (1) has been created by virtue of section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018, or

(b) to anything done under the authority of a licence issued by virtue of section 15(3A) of that Act.

(3) It is a defence for a person charged with an offence under this section to prove that they did not know and could not reasonably have been expected to know that they were subject to director disqualification sanctions at the time at which they engaged in that conduct.

(4) In this section “person who is subject to director disqualification sanctions” means a person who under regulations under section 1 of the Sanctions and Anti-Money Laundering Act 2018 is a person subject to director disqualification sanctions for the purposes of this section and Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002 (see section 3A of the Sanctions and Anti-Money Laundering Act 2018).

22I

(1) The Secretary of State may by regulations amend this Act for the purpose of applying, or modifying the application of, any of its provisions in relation to relevant entities.

(2) For that purpose, the regulations may in particular—

(a) extend the company disqualification conditions to include corresponding conditions relating to a relevant entity;

(b) limit the company disqualification conditions to remove conditions relating to a relevant entity;

(c) modify which company disqualification conditions can, in combination with each other, result in a person being disqualified under this Act;

(d) provide for any of the company disqualification conditions to result in or contribute to a person being disqualified from acting in a role or doing something in relation to a relevant entity.

(3) In this section “the company disqualification conditions” means the conditions that can result in or contribute to a person being disqualified under this Act from acting in a role or doing something in relation to any entity.

(4) In this section a “relevant entity” means—

(a) a limited partnership registered under the Limited Partnerships Act 1907;

(b) a limited liability partnership registered under the Limited Liability Partnerships Act 2000;

(i) constituted under the law of Scotland, and

(ii) a qualifying partnership within the meaning given by regulation 3 of the Partnerships (Accounts) Regulations 2008.

(5) Regulations under this section may make—

(a) consequential, supplementary, incidental, transitional or saving provision;

(b) different provision for different purposes.

(6) The provision which may be made by virtue of subsection (5)(a) includes provision amending provision made by or under either of the following, whenever passed or made—

(a) an Act;

(b) Northern Ireland legislation.

(7) Regulations under this section are to be made by statutory instrument.

(8) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

Disqualification for promoting tax avoidance

8ZF

(1) The court must make a disqualification order against a person if, on an application under this section, it is satisfied—

(a) that the person has at any time after the coming into force of this section been a director of a company while the company was a relevant body within the meaning of section 85(4) of the Finance Act 2022 (winding up of promoters of tax avoidance schemes), and

(b) that a court has made a winding-up order in respect of the company under section 85(3) of that Act (whether while the person was a director or subsequently).

(2) An officer of Revenue and Customs may make an application to the court for a disqualification order against a person under this section if it appears to the officer that it is expedient in the public interest for such an order to be made.

(3) Except with the permission of the court, an application under subsection (2) may not be made after the end of the period of 3 years beginning with the day on which the winding-up order in question is made.

(4) Under this section the minimum period of disqualification is 2 years, and the maximum is 15 years.

(5) An officer of Revenue and Customs may accept a disqualification undertaking if it appears to the officer—

(a) that the conditions mentioned in subsection (1) are satisfied in relation to the person who has offered to give the disqualification undertaking, and

(b) that it is expedient in the public interest that the officer should accept the undertaking (instead of applying, or proceeding with an application, for a disqualification order).

(6) In this section—

“company” includes overseas company;

“court” means—the court having jurisdiction for the purposes of the Insolvency Act 1986, orthe High Court in Northern Ireland;

“director” includes a shadow director.

8ZG

(1) The court may make a disqualification order against a person if, on an application under this section, it is satisfied—

(a) that the person—

(i) is a director of a company that carries on business as a promoter within the meaning of Part 5 of the Finance Act 2014 (promoters of tax avoidance schemes), or

(ii) after the coming into force of this section, was a director of a company at a time at which it did so, and

(b) that the person’s conduct in relation to the company (either taken alone or taken together with the person’s conduct as a director of one or more other companies) makes the person unfit to be concerned in the management of a company.

(2) For the purposes of subsection (1)(a)(i), Part 5 of the Finance Act 2014 has effect as if, in section 234 of that Act—

(a) references to “tax” included value added tax and other indirect taxes, and

(b) the definition of “tax advantage” also included a tax advantage as defined for VAT in paragraph 6, and for other indirect taxes in paragraph 7, of Schedule 17 to the Finance (No. 2) Act 2017 (disclosure of tax avoidance schemes: VAT and other indirect taxes).

(3) References in subsection (1)(b) to a person’s conduct include conduct occurring before, as well as after, the coming into force of this section.

(4) An officer of Revenue and Customs may make an application to the court for a disqualification order against a person under this section if it appears to the officer that it is expedient in the public interest for such an order to be made.

(5) The maximum period of disqualification under this section is 15 years.

(6) An officer of Revenue and Customs may accept a disqualification undertaking if it appears to the officer—

(a) that the conditions mentioned in subsection (1) are satisfied in relation to the person who has offered to give the disqualification undertaking, and

(b) that it is expedient in the public interest that the officer should accept the undertaking (instead of applying, or proceeding with an application, for a disqualification order).

(7) In this section—

“company” includes overseas company;

“the court” means—in England and Wales, the High Court;in Scotland, the Court of Session;in Northern Ireland, the High Court in Northern Ireland;

“director” includes a shadow director;

“indirect tax” has the same meaning as in Schedule 17 to the Finance (No. 2) Act 2017 (see paragraph 2(1) of that Schedule).

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