The Company Directors Disqualification Act 1986 of U.K. (CDDA) was came into force in 1986, which describes the practices for company directors to be disqualified in certain cases of exploitation of company policies.

This act states that, a person who is acting as a director, administrator or liquidator, receiver or manager of company, can be disqualified for his criminal convictions, who is directly or indirectly concerned or involved in the formation, promotion or management of the company for a particular period.

There can be many circumstances on the basis of which disqualification of director can take place such as – fraud, involvement in illegal trading, constant violation of the company’s legislation, committing offences.

There are many other reasons for disqualification of a director, like if the person holding the place of director is an un-discharged bankrupt. As per law, if a person acting as director of the company is directly dealing with bankruptcy matters, he should not be allowed to be a director, and must not be allowed to have any direct connection with the company’s promotion or management aspects.

Under the Company Directors Disqualification Act, 1986, of U.K. the director of a company who became insolvent may be disqualified, if the court is satisfied that director’s behavior is unfit for the company or management of the company.

Unfit behavior includes:

Failure of a director for submitting annual accounts of company to Companies House within time

Failure to submit annual returns to Companies house within time

Excessive drawing or salaries at time of insolvency of company

Trading at the time of insolvency of company

Distortion of the facts of the company

Failure to respond or comply with a liquidator’s requests

Once the disqualification order of any person acting as director is being issued, then that person may not act in contravention of that order. Or else that person will become guilty and may become liable to imprisonment.