Quick Answer
Section 6 of the CDDA 1986 applies to directors of companies that have become insolvent. Section 8 applies where the Insolvency Service obtains investigatory material from other regulators or government departments and concludes that disqualification is in the public interest, regardless of whether the company is insolvent.
The key distinction: Section 6 requires company insolvency and carries a mandatory two-year minimum ban, while Section 8 operates independently of insolvency status with discretionary sentencing and no mandatory minimum.
Why Two Separate Routes Exist
The framework emerged from different enforcement needs. Section 6 follows the traditional insolvency pathway, where a failing company triggers a report from the appointed insolvency practitioner. Section 8 addresses misconduct identified through other regulatory bodies: HMRC, the FCA, Companies House and equivalents, in situations where insolvency isn’t necessarily involved at all.
Side-by-Side Comparison
| Aspect | Section 6 CDDA 1986 | Section 8 CDDA 1986 |
|---|---|---|
| Trigger | Company enters insolvent liquidation or administration | Insolvency Service obtains investigatory material from another authority |
| Who provides the initial report? | Insolvency practitioner files a D Report within 3 months | Regulator, government department or enforcement agency shares material |
| Is insolvency required? | Yes — company must be or have been insolvent | No – the company may be live, insolvent or dissolved |
| Is disqualification mandatory? | Yes — the court must disqualify if unfit conduct is proved | No – the court has discretion and disqualifies only if it thinks fit |
| Minimum ban period | 2 years | No mandatory minimum |
| Maximum ban period | 15 years | 15 years |
| Who can bring proceedings? | Secretary of State or Official Receiver | Secretary of State only |
| Limitation period | 3 years from insolvency, per CDDA 1986, s.7(2) | No fixed statutory period – the court weighs delay and any resulting prejudice to the director on the facts of the case |
| Examples of triggering material | D Report from liquidator or administrator | HMRC investigation findings, FCA investigation, Companies House data |
| Applies to a dissolved company? | Not under the original Section 6, but a December 2021 amendment extended powers to dissolved companies | Yes – Section 8 has always applied to live, insolvent and dissolved companies |
| Common grounds | Unfit conduct during insolvency: trading whilst insolvent, failure to keep records, non-payment of Crown debts | Regulatory misconduct: immigration violations, financial crime, anti-money laundering failures |
A note on the limitation periods. Section 6’s 3-year window is a hard statutory rule under CDDA 1986, s.7(2) – proceedings must be brought within three years of the company becoming insolvent, and there is essentially no flexibility on the deadline itself. Section 8 is different: the Act does not set out an equivalent fixed period at all. Because Section 8 proceedings can follow a lengthy separate regulatory investigation, the courts instead ask whether any delay in bringing the case was unreasonable and whether it has caused real prejudice to the director’s ability to defend the allegations. Treating Section 8 as though it carried the same clean 3-year cut-off as Section 6 is one of the more common, and more costly, misreadings of the Act.
Section 6 in Practice
Section 6 is the workhorse of the CDDA 1986 enforcement regime. Of the 1,036 directors disqualified in 2024/25, the overwhelming majority were disqualified under Section 6 following insolvency investigations.
Section 6 is triggered when a company enters formal insolvency. The appointed liquidator or administrator must file a D Report within three months, after which the Insolvency Service decides whether to investigate further. If unfit conduct is proved, disqualification is mandatory – Section 6 uses “shall” disqualify, not “may.”
Where a court does disqualify under Section 6, the length of the ban is set by reference to three tariff bands developed in case law, most notably Re Sevenoaks Stationers (Retail) Ltd [1991] Ch 164 – rather than by the CDDA 1986 itself, which sets only the outer statutory limits of 2 and 15 years. Those judicially developed bands are commonly summarised as:
- 2–5 years for less serious cases
- 6–10 years for serious cases
- 11–15 years for the most serious cases, including repeat offenders
These brackets are guidance the courts apply when exercising their discretion on length, not wording lifted from the Act, and courts have also drawn on them by analogy when fixing periods under Section 8.
Section 8 in Practice
Section 8 gives the Insolvency Service a broader enforcement tool for cases that fall outside the conventional insolvency pathway. It applies whenever regulators such as HMRC, the FCA or Companies House share investigatory material with the Insolvency Service, and it is available whether the company is trading normally, insolvent, or already dissolved.
Typical triggers include tax evasion findings, financial misconduct uncovered by the FCA, corporate fraud, and immigration enforcement action against a company. Because there is no statutory minimum ban and no requirement of insolvency, Section 8 cases can look very different from one another, and directors are frequently caught out by assuming a solvent, trading company puts them out of reach.
Which Section Applies to Your Situation?
Section 6 is likely to apply if:
- Your company entered liquidation or administration
- A D Report has been (or is being) filed
- The Insolvency Service has been in contact following the company’s failure
- Any investigation focuses on conduct that contributed to that failure
Section 8 is likely to apply if:
- Your company hasn’t entered formal insolvency
- A regulator other than the Insolvency Service has investigated your conduct
- The allegations are regulatory in nature rather than tied to the company’s insolvency
Common Mistakes Directors Make
- Assuming that because a company is solvent and trading, Section 8 proceedings cannot be brought – they can.
- Misunderstanding that Section 8 requires no insolvency at all, unlike Section 6.
- Not taking legal advice as soon as the Insolvency Service or another regulator makes contact.
- Assuming Section 8 carries the same fixed 3-year limitation clock as Section 6, when in fact the court applies a case-by-case delay-and-prejudice test instead.
What Disqualification Actually Means
Whichever route is used, a disqualification order (for the length of the ban), prohibits a director from acting as a director of any UK company, from being directly or indirectly concerned in the promotion, formation or management of a company without the court’s permission, and from acting as an insolvency practitioner. Acting in breach of a disqualification order is a criminal offence and can also expose the individual to personal liability for the debts of any company they go on to manage.
Facing a Section 6 or Section 8 Investigation?
Regulators, claimants and boards are coming after individuals, not just companies. If you’ve received a D Report, been contacted by the Insolvency Service, or another regulator has passed material on for a public interest decision, which route applies changes what evidence matters, what deadlines are live, and how a defence should be built. We help directors work out which proceedings they’re actually facing and put the right specialist support behind them before they respond. To learn more, contact our team at Essential Counsel for a confidential discussion.
Disclaimer: This article provides general information only. It is not legal advice and does not create a solicitor-client relationship. Laws and interpretations change. Readers are encouraged to confirm details with current primary sources or a qualified solicitor.