6 The Company Directors Disqualification Act （CDDA） 1986 was introduced to control individuals who persistently abused the various privileges that 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：

　　（i） a director of a company；

　　（ii） a liquidator or administrator of a company；

　　（iii） a receiver or manager of a company‘s property； or

　　（iv） in any way， whether directly or indirectly， concerned with or taking part in the promotion， formation or management of a company.

　　The CDDA 1986 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.2 of the CDDA 1986）。 The maximum period for disqualification under s.2 is five years where the order is made by a court of summary jurisdiction， and 15 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 （s.3 of the CDDA 1986）。 Section 3 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， he has been adjudged guilty of three or more defaults （s.3（2） of the CDDA 1986）。 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.4 of the CDDA 1986）。 A court may make a disqualification order if， in the course of the winding up of a company， it appears that a person：

　　（1） has been guilty of an offence for which he is liable under s.993 of the CA 2006， that is， that he has 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； or

　　（2） 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 his duty as such officer， liquidator， receiver or manager （s.4（1）（b） of the CDDA 1986）。

　　The maximum period of disqualification under this category is 15 years.

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