disqualification of directors

Definition

Any person who is (1) personally insolvent, (2) an undischarged bankrupt, or (3) disqualified by a court order for implication in dishonesty or fraud punishable by imprisonment, may be disqualified from holding the office of a director. However, a director who leads a firm into insolvency is normally not automatically disqualified from directorship in another firm unless debarred by a court order for criminal misconduct. A disqualification order commonly lasts for five years after issuance or the release of the person from prison.