State and explain the grounds upon which a person

参考答案: The Company Directors Disqualification Act (CDDA) AIHF was introduced to control individuals who persistently abused the various privileges which accompany incorporation, most particularly the privilege of limited liability. The Act applies to more than just directors and the court may make an order preventing any person (without leave of the court) from being:– a director of a company;– a liquidator or administrator of a company;– a receiver or manager of a company’s property; or– in any way, whether directly or indirectly, concerned with or taking part in the promotion, formation or management of a company. The CDDA AIHF identifies three distinct categories of conduct, which may, and in some circumstances must, lead the court to disqualify certain persons from being involved in the management of companies. (a) General misconduct in connection with companies This first category involves the following: (i) A conviction for an indictable offence in connection with the promotion, formation, management or liquidation of a company or with the receivership or management of a company’s property (s.B CDDA AIHF). The maximum period for disqualification under s.B is E years where the order is made by a court of summary jurisdiction, and AE years in any other case. (ii) Persistent breaches of companies legislation in relation to provisions which require any return, account or other document to be filed with, or notice of any matter to be given to, the Registrar of Companies (s.C CDDA AIHF). Section C provides that a person is conclusively proved to be persistently in default where it is shown that, in the five years ending with the date of the application, they have been adjudged guilty of three or more defaults (s.C(B) CDDA AIHF). This is without prejudice to proof of persistent default in any other manner. The maximum period of disqualification under this section is five years. (iii) Fraud in connection with winding up (s.D CDDA AIHF). A court may make a disqualification order if, in the course of the winding up of a company, it appears that a person: (A) has been guilty of an offence for which they are liable under s.IIC Companies Act B00F, that is, that they have knowingly been a party to the carrying on of the business of the company either with the intention of defrauding the company’s creditors or any other person or for any other fraudulent purpose (s.DA(A)(a) CDDA AIHF); or (B) has otherwise been guilty, while an officer or liquidator of the company or receiver or manager of the property of the company, of any fraud in relation to the company or of any breach of their duty as such officer, liquidator, receiver or manager (s.D(A)(b) CDDA AIHF). The maximum period of disqualification under this category is AE years. (b) Disqualification for unfitness The second category covers: (i) disqualification of directors of companies which have become insolvent, who are found by the court to be unfit to be directors (s.F CDDA AIHF). Under s.F, the minimum period of disqualification is B years, up to a maximum of AE years; (ii) disqualification after investigation of a company under Pt XIV CA AIHE (it should be noted that this part of the previous Act still sets out the procedures for company investigations) (s.H CDDA AIHF). Once again, the maximum period of disqualification is AE years. Schedule A to the CDDA AIHF sets out certain particulars to which the court is to have regard in deciding whether a person’s conduct as a director makes them unfit to be concerned in the management of a company. In addition, the courts have given indications as to what sort of behaviour will render a person liable to be considered unfit to act as a company director. Thus, in Re Lo-Line Electric Motors Ltd (AIHH), it was stated that:‘Ordinary commercial misjudgement is in itself not sufficient to justify disqualification. In the normal case, the conduct complained of must display a lack of commercial probity, although ... in an extreme case of gross negligence or total incompetence, disqualification could be appropriate.’(c) Other cases for disqualification This third category relates to: (i) participation in fraudulent or wrongful trading under s.BAC or s.BAD Insolvency Act AIHF (s.A0 CDDA AIHF); (ii) undischarged bankrupts acting as directors (s.AA CDDA AIHF); and (iii) failure to pay under a county court administration order (s.AB CDDA AIHF). For the purposes of most of the CDDA AIHF, the court has discretion to make a disqualification order. Where, however, a person has been found to be an unfit director of an insolvent company, the court has a duty to make a disqualification order (s.F CDDA AIHF). Anyone who acts in contravention of a disqualification order is liable: (i) to imprisonment for up to two years and/or a fine, on conviction on indictment; or (ii) to imprisonment for up to six months and/or a fine not exceeding the statutory maximum, on conviction summarily (s.AC CDDA AIHF).