Disqualification Of Directors Flashcards
What legislation governs director disqualification in Ireland?
Chapter 4 of Part 14, Companies Act 2014.
What is the purpose of disqualification?
To protect the public from individuals unfit to manage companies—not to punish them.
Forrest v Whelan
What are the two main types of director disqualification?
Automatic disqualification (s.839) and discretionary disqualification (s.842).
When does automatic disqualification occur?
When a person is convicted on indictment of fraud, dishonesty, or a company law offence.
What is the default disqualification period for automatic disqualification?
5 years (court may vary).
Does the court have discretion on applying s.839?
No – it applies automatically upon conviction.
What is required for discretionary disqualification?
A court application and proof that one of the s.842 grounds applies.
Name 3 common grounds under s.842.
Fraud or breach of duty, failure to keep books (s.286), director of a struck-off company.
What is the most common and flexible ground for disqualification?
Being unfit to manage a company (s.842(d)).
Who can apply under all s.842 grounds (a–j)?
The Corporate Enforcement Authority (CEA).
Who can apply under (a–g)?
The Director of Public Prosecutions (DPP).
Who can apply under ground (f) (persistent default)?
Registrar of Companies.
What case established a two-step test for disqualification?
Re Kentford Securities [2011].
What was the outcome in PSK Construction [2009]?
7-year disqualification for Revenue default and reckless trading.
What did the court find in Re CB Readymix?
De facto director who dumped records was disqualified for 7 years.
What are the typical disqualification periods based on seriousness?
2–5 years: Less serious, 6–10 years: More serious, 10+ years: Very serious (e.g. fraud).
Can mitigating factors reduce the disqualification period?
Yes – e.g., cooperation, early resignation, not contesting order.
Can a person voluntarily accept disqualification?
Yes – by signing a disqualification acceptance document (s.850).
Can someone apply to lift a disqualification order?
Yes, under s.847 if it is just and equitable.
Can the court award investigation costs against the disqualified person?
Yes – under s.846 CA 2014.
What happens if a disqualified person breaches their order?
It is a Category 2 offence, may lead to an additional 10-year disqualification, and may result in personal liability for company debts.
