When a company collapses, the immediate questions are usually financial: how much is owed, what assets remain, and what can creditors recover? English law asks another question that is just as important: should the person responsible for the way that company was run be allowed to manage another company again?

 

The United Kingdom has addressed that question for decades through the Company Directors Disqualification Act 1986. Under this law, a director whose conduct is judged “unfit” can be banned from running any company for up to fifteen years. The list of unfit conduct reads like a charge sheet of very familiar behaviour; trading on when the company cannot pay its debts, failing to keep proper accounts, failing to file returns, failing to pay the company’s tax, using company money for personal purposes. The names go on a public register that anyone can search in thirty seconds: a bank, a supplier, a prospective joint venture partner. Break the ban and you risk prison and personal liability for the company’s debts.

 

Jordan is not entirely unfamiliar with this concept. Article 7 of the Jordanian Insolvency Law No. 21 of 2018 requires those managing a legal person to apply for the declaration of insolvency within two months from the date on which they actually knew, or ought reasonably to have known, that the debtor was insolvent. Failure to comply may result in personal liability for the resulting damage. More strikingly, the court may prohibit the person responsible from carrying on any economic activity for a period of between one and five years.

 

However, Jordan's restriction is tied to a specific failure arising in the context of insolvency. It does not operate as a comprehensive director-disqualification regime addressing serious patterns of corporate misconduct more broadly. Nor is there an equivalent publicly searchable register through which market participants can readily determine whether someone has been prohibited from managing or conducting business. Nor is there a general mechanism integrated with company registration that prevents a disqualified person from simply appearing again as the manager or controller of a newly established company.

 

That gap is increasingly important in light of Jordan's broader reforms concerning imprisonment for civil and commercial debts. Recent amendments to the Execution Law have substantially restricted the circumstances in which debtors may be imprisoned. The policy direction is understandable: inability to pay a civil debt should not automatically result in deprivation of liberty.

 

But removing or significantly limiting imprisonment makes it even more important to ensure that creditors and the market have effective alternative protections against deliberate or repeated corporate misconduct.

 

The answer should not be to imprison people simply because their businesses fail. Business failure is part of commercial life, and an honest entrepreneur should not be punished because a venture did not succeed. The law must distinguish between failure and misconduct.

 

Where, however, a person repeatedly misuses companies, conceals assets, disregards legal obligations, leaves creditors unpaid through serious misconduct, or simply moves from one failed entity to another, the market needs a proportionate mechanism to respond.

 

Jordan could therefore consider a clearer director-disqualification regime, preferably integrated into the Companies Law and linked to the Companies Control Department. It could identify specific statutory grounds for disqualification, provide for a court-ordered ban for an appropriate period, guarantee a right of appeal, and create a public searchable register that automatically prevents a disqualified person from being registered as a manager or director during the prohibited period.

 

The commercial benefit would extend well beyond punishing bad actors. Suppliers could make better credit decisions. Banks could assess management risk more accurately. Foreign investors could conduct more meaningful due diligence. Responsible directors would also benefit, because the system would finally distinguish them from those who repeatedly misuse the protection of limited liability.

 

Jordan has already accepted the principle. The next question is whether it should make that principle broader, more visible and easier for the market to use. In a credible corporate system, it is not enough to know which companies have failed, the market also needs to know who was responsible.

 

As Jordan moves away from imprisonment as a tool for enforcing ordinary civil debt, the need for modern, targeted and commercially effective alternatives becomes more important. The objective should be simple: protect honest failure, but make repeated corporate misconduct visible and consequential.