Disqualified Directors - Pre 18 June 2009
For disqualifications post 18 June 2009 please see: Disqualified Company Officers Post 18 June 2009
The Financial Supervision Commission expects the highest standards of conduct from those involved in the corporate governance of companies. Where, prior to 18 June 2009, a person’s conduct indicated that they were potentially unfit to perform such a role, the Commission could petition the High Court of Justice of the Isle of Man under Section 26 of the Companies Act 1992 seeking disqualification of that person from acting as:
- a director of a company; or
- a secretary of a company; or
- a liquidator of a company; or
- a receiver or manager of a company's property; or
- in any way, whether directly or indirectly, being concerned or taking part in the promotion, formation or management of a company unless that person has the consent of the Court.
Disqualification of persons for fraudulent trading.
Prior to 18 June 2009, in cases where the High Court of Justice of the Isle of Man made a declaration under Section 259(1) of the Companies Act 1931 that any of the directors of a company, whether past or present, were knowing parties to the carrying on, by the company, of business with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, or, where a person was convicted by the High Court of Justice of the Isle of Man under Section 259(3) of the Companies Act 1931 of being as a director knowingly a party to the carrying on of the business in manner aforesaid the court could also under Section 259(4) of the Companies Act 1931 order that that person shall not, without the leave of the court, be a director of or in any way, whether directly or indirectly, be concerned in or take part in the management of a company for a period, not exceeding five years..
Disqualification of directors of insolvent companies.
Prior to 18 June 2009 in cases where a person was or had been the director of a company which had at any time gone into liquidation and was insolvent, and had been the director of another such company which went into liquidation within the previous 5 years, and the conduct of the person as director of any of those companies made him unfit to be concerned in the management of a company, the Commission could apply to the High Court of Justice of the Isle of Man under Section 31(1) of the Companies Act 1982 for an order that the person shall not, without the leave of the Court, be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of a company for such period as the court may specify, beginning with the date of the order and not exceeding 5 years.
With effect from 18 June 2009 the Company Officers (Disqualification) Act 2009 came into effect. This new Act replaced the above provisions, however, unexpired disqualifications under the above provisions were continued under the new Act. For details of the provisions of the Company Officers (Disqualification) Act 2009 please see: Disqualified company officers – Post 18 June 2009