The disqualification of a director usually refers to a director found to have conducted the affairs on an insolvent company in an ‘unfit’ manner. A director of a limited company can be disqualified if, during his term of office, a liquidator establishes sufficient evidence of ‘unfit’ conduct which leads to a prosecution by the Disqualification Unit of the Insolvency Service. As a result of disqualification the individual is not allowed to hold any management position in a company for between 2 and 15 years and faces criminal sanctions and personal liability for the new company’s debts if they contravene the disqualification order. A disqualification undertaking given to avoid the court action has the same legal effect.