The law and the phoenix
Page 26
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A director of a tailed company can become a director of a new company unless: • he or she is subject to a disqualification order or undertaking, • he or she Is personally adjudged bankrupt, • he or she is subject to a bankruptcy restrictions order or undertaking.
The 1986 Insolvency Act makes it an offence for a director of a company that has gone into insolvent liquidation to be a director of a company with the same or a similar name, or concerned in its management, without leave of the court, within five years of the winding up. A director who contravenes the Act may be made liable for the debts of the original company after he became director.
Under the 1986 Company Directors Disqualification Act, courts can disqualify directors whose companies have failed as a direct result of their misconduct, for up to 15 years. The liquidator can take recovery action where the tailed company has entered into a sale at a lower than market value at a time when the company was unable to pay its debts.
Source: www.payontime.co.uk