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Section 218 of The Companies Act No. 17 of 2015: Duty of court to disqualify unfit directors and secretaries of insolventcompanies

    

(1) A court shall make a disqualification order against a person if satisfied, on an application made to it under section 219—
(a) that the person is or has been a director or secretary of a company that has at any time become insolvent whether while the person was a director or secretary or subsequently; and
(b) that the conduct of the person as a director or secretary of that company either taken alone or taken together with the person's conduct as a director or secretary of any other company or companies makes the person unfit to take part in the management of a company.
(2) If a court is required to determine whether a person's conduct as a director or secretary of any particular company or companies makes the person unfit to be concerned in the management of a company, the Court shall, in relation to the director's conduct as a director or secretary of that company, or each of those companies, have regard in particular—
(a) to the matters referred to in Part 1 of the Second Schedule; and
(b) if the company has become insolvent, to the matters referred to in Part 2 of that Schedule, and references in that Schedule to the director or secretary and the company are to be read accordingly.
(3) For the purposes of this section , a company becomes insolvent if—
(a) the company is placed in liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the liquidation; or
(b) the company is under administration.
(4) A reference in this section to the conduct of a person as a director or secretary of a company or companies include, if that company or any of those companies has become insolvent, the conduct of that person in relation to any matter connected with or arising out of the insolvency of that company.
(5) The maximum period that can be imposed in a disqualification order made under this section is fifteen years and the minimum period is two years.

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Disclaimer: This document is not to be taken as legal advise.

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