Small Business, Enterprise and Employment Act 2015: Determining Directors’ Unfitness
Determining directors’ unfitness – 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.
Thechanges 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 & Joneswe can advise on all matters subject to these posts.
Section 106 of the Act makes further provision for increased transparency in companies by widening the matters which the Court may consider when determining whether a director is unfit, in respect of director disqualification proceedings.
The Courts may now have regard to matters connected to overseas company, where previously such matters were inadmissible in director disqualification proceedings. The Court must of course be persuaded that any involvement in these overseas matters comprised misconduct before it can make a finding that such misconduct merits a finding of unfitness (and therefore disqualification).
We suggest that the limitation of resources available to investigators will undoubtedly make such evidence largely unavailable in all but the largest high profile case, but this will really depend on the availability of evidence from these overseas events.
As stated above, these proceedings now equally apply to shadow directors.