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(b) Disqualification for unfitness
The second category covers:
?。╥) disqualification of directors of companies which have become insolvent, who are found by the court to be unfit to be directors (s.6 of the CDDA 1986)。 Under s.6, the minimum period of disqualification is two years, up to a maximum of 15 years;
?。╥i) disqualification after investigation of a company under Pt XIV of the CA 1985 (it should be noted that this part of the previous Act still sets out the procedures for company investigations) (s.8 of the CDDA 1986)。 Once again, the maximum period of disqualification is 15 years.
Schedule 1 to the CDDA 1986 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 (1988), it was stated that:
‘Ordinary commercial misjudgment 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.’
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