Secretary of State for Trade and Industry v Arif and Others: ChD 25 Mar 1996

The length of a director’s disqualification is not to be discounted for the time elapsed up to the hearing of the case. As to section 221 of the Companies Act, it : ‘has, at the least, two purposes. First, to ensure that those who are concerned in the direction and management of companies which trade with the privilege of limited liability, do maintain sufficient accounting records to enable them to know what the position of the company is from time to time. Without that information, they cannot act responsibly in making decisions whether to continue trading. But equally important is a second purpose. If the company fails, a licensed insolvency practitioner will become office holder; as liquidator or as administrator or as administrative receiver. The office holder requires information as to the company’s trading and transactions which is sufficient to enable him to identify and recover or exploit the company’s assets. His task is made extremely difficult, if not impossible, if the company has failed to comply with its obligations under s 221 of the 1985 Act.’
References: Times 25-Mar-1996, [1997] 1 BCLC 34
Statutes: Company Directors Disqualification Act 1986, Companies Act 1985 221
This case is cited by:

  • Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
    The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
    Held: The answer was a mixture of fact and law. A breach of . .
    ([2003] EWHC 2843 (Ch), , Times 02-Dec-03)

These lists may be incomplete.
Last Update: 21 November 2020; Ref: scu.89112