Thursday, 2 April 2015

Small Business, Enterprise and Employment Act 2015: Disqualification Following Convictions Abroad

Disqualification following convictions abroad – COMMENCEMENT ORDER TO BE ANNOUNCED

This is part of a series of posts on the Small Business, Enterprise & Employment Bill that has now come into force on 26 March 2015 following the grant of Royal Assent and is now the Small Business, Enterprise and Employment Act 2015 (“the Act”).
This series of posts is intended to update the readers of the key changes, which should radically transform the transparency of the marketplace as regards the operation, control, ownership and risk associated to limited companies in the UK.
We have not addressed all of the issues described in our previous posts, to avoid duplication, but would welcome any queries from the reader in this respect.
The commencement of these changes is different dependant on which part of the Act is being reviewed (Section 164 of the Act defines commencement) and we have highlighted below the relevant commencement dates. Where we below stated “to be announced” this means it has not yet come into force and will commence upon the making of a Commencement Order.
The changes as set out below will be extremely important to all directors, companies and individuals with business in the future and it cannot be emphasised too strongly how important it is that you are prepared for these proposed changes. At Francis Wilks & Jones we can advise on all matters subject to these posts.
Section 104 of the Act has provided that in the criminal Courts, in a similar way as to how the Registrar of Companies may bring disqualification proceedings after a criminal conviction for failures to file accounts and returns, the Secretary of State may now issue disqualification proceedings for a disqualification order to be made if a defendant director has been convicted of offences overseas.
The convictions abroad must either relate to the promotion, formation or management of a company or comprise an indictable criminal offence, i.e. a serious crime (offences in the foreign equivalent of a Magistrates’ court do not count).
Additionally, there is the ability for the individual against who such disqualification is sought to offer a disqualification undertaking, thus avoiding any costs of the legal proceedings. This is particularly important as very recently the Ministry of Justice were considering increasing criminal victim surcharges and seminal costs orders in criminal proceedings (which historically were not high, usually around £120) to approximately £1,000.
This will have incredible consequences for UK directors who may be involved in international companies and who may now be potentially disqualified despite having a clean record in the UK.

Should you require advice on this, or consider that this may impact on you or your clients, please contact Francis Wilks & Jones and we can assist by reference to our long history of dealing with director disqualification matters.