Part 14 – Compliance and Enforcement

8 Chapters – Sections 408 to 427

Chapter Overview

Chapter 1 – Compliance and Protective Orders

Chapter 2 – Disclosure Orders

Chapter 3 – Restrictions on directors of insolvent companies

Chapter 4 – Disqualification generally

Chapter 5 – Disqualification and restriction undertakings

Chapter 6 – Enforcement in relation to qualification and restriction

Chapter 7 – Provisions relating to offences generally

Chapter 8 – Additional General Offences

Part 14 Summary

The various compliance and enforcement measures under the Act.

What is new?

The Act sets out a new provision whereby a company with and officer who has been restricted under the Act will not be entitled to use the Summary Approval Procedure to ratify transactions. A new provision allows the avoidance of a court appearance whereby the Director of Corporate Enforcement gives and the individual accepts a restriction or disqualification.

What is different?

Offences under the Act have now been categorised into 4 distinct categories with varying levels of penalties applicable dependant on the category into which the offence falls. There has been a significant increase in the minimum share capital thresholds for companies that wish to appoint restricted persons as a director.

What are the Key Points?

• Company with restricted office not entitled to use SAP
• Increase in minimum share capital requirement where a company wishes to appoint a restricted person
• Can avoid Court appearance if individual accepts restriction or disqualification
• 4 Categories of offences

What do accountants need to do?

An accountant must be aware of the categories of offence so as to advise their clients and of the potential penalties for such offences. Auditors must be aware of their reporting obligations. They should be familiar with the various orders a court can make in relation to the assets of a company under investigation.

What do companies need to do?

A company must comply with a protective order in relation to its assets or a disclosure order in relation to financial information. Any restricted person is required to give notice to the company of their restriction before accepting an appointment to the company.  Internal procedures must take account of any limitations on use of the SAP or restrictions in relation to shares where an officer of the company is restricted under the Act.