Finding it all rather humiliating

wolfers

I guess I'm a little bit in last-straw territory.

I run a limited company -- it's just me -- and, because I'm going personally bankrupt next month, I have to resign as a director. I was just going to shut the company down and become a sole trader but my accountant recommended I get someone to be a director during the year of my bankruptcy.

Which is where the humiliation comes in. I've mentioned it to a number of my friends -- no-one wants to say "no" so they all change the subject. The latest was an e-mail from a friend who said he might be up for it but "I want to better understand my responsibilities (and potential liability) before committing."

Now, OK, that's sensible of him and reasonable. But it's really upset me. The subtext -- in my mind -- is that he doesn't trust me. Why would I ask him to do something that would cause him risk? I've known him for over ten years.

I just get the impression that my friends all think they're better than me now. And that I'm no longer trustworthy.

As someone pointed out on another thread, bankruptcy is *not* the easy option.

curly04

Hey huni dont be daft, question:- before you took on a job wouldn't you want to know all the in's and out's of it

Ask anyone in the Inn im the person who will way up every situation in 12 different ways before I comment to anything.

Dont worry - you are reading to much into it - again something I do!

I know this is very hard for you, I've not had my own company etc but I've found the process very humiliating to. We are all here for you remember that. Also why dont you speak to your friend on the phone rather than e-mail. spoken works sound different than read words, but they say the same thing!

Good luck
Curly

IF

Hello wolfers, couldn't have said it any better than curly. Just want to say all the best and we do all know how your feeling, it 'will' get better!! lol x

dojoman

Totally agree with curly and IF, it does get better, although at the moment it doesn`t feel like it will, but it does believe me

foolishboy

I'm afraid this reaction is quite normal, and I'm not so sure you're being paranoid. The fact is that BR is still a VERY dirty word, and the majority of people don't even fully understand what causes it, or the consequences of it.

All I can say, from personal experience, is that this is when you find out who your true friends are.

Chin up though, it really does only get better!
FB

SadEyed

Hi Wolfers - as the others have said - it will get better. Bankruptcy made me a little paranoid for a while - wondering why people didn't call me back etc. All completely imagined as I can't believe how supportive people have been when I've sat down & had a conversation with them.

Try not to judge your friend too harshly. Having a limited company does involve certain legal responsibilities that could impact him if something went wrong. The fact he is asking the questions suggests he's actually quite smart & a good person to have around. I used to have a limited company years ago & got in a right mess because I didn't take it seriously.

Good luck - just talk about it is my suggestion.

Flyright

SadEyed is correct in what he says. I was asked to do exactly what you are asking your friends to do. I actually sought advice on it and was told that I shouldn't do it because the Companies Act now puts much greater legal responsibilities on directors, including that they can be disqualified if they are in breach of their legal duties. I think it might e especially dubious in this case because wolfers has said he's effectively the company himself so any diretor he installs wouldn't be 'running' the company as such because Iassume he would be going out and getting the contracts himself, which is actually a breach of the bankruptcy rules as he would be acting as a manager of the company. To be honest I'm not surprised why his friends are reluctant..it could lead to them being made personally responsible.

JCS1

Agree with Flyright - your accountant is giving you slightly dodgy advice.

If you were asking A N Other to be a Director in name only whilst you still ran the limited company, than that is also not allowed.

The NTB2 - duties and responsiblities whilst bankrupt - that you sign states that you cannot be a director of a company or be involved in the management of one.

confused76

have you spoken to the business debtline? might be an idea

it's difficult to know if people understand br, and i know i was paranoid about what people think...

as others suggested it always sounds better face to face, but i would try business debtline to check the advice you have had is sound x

onward

Wolfers

The suggestion that was put to you is the same as was put to me. I also was sole director of a Ltd Co (albeit, I did not want to continue trading in any way), and was advised to put in someone else as director as I would have to resign. It was suggested to me to use a close friend or family member, as their only role would be to appoint an IP to close down the business.

I was not comfortable in doing this, for precisely the reason your friend mentions - I could not be confident that I knew exactly what their liability would be. It's bad enough putting yourself through BR, but the thought of dragging in a loved one was too much for me.

In your position, yes get advise from business debtline, but even better - ask your accountant for a recommended IP. You should be able to get a consultation for free, and you can mention that you want to continue as a sole trader. These guys are the experts, and should be able to tell you if involving them is an option. I do stress, get a recommendation from your accountant for an IP, as it'll make it all a lot smoother. Of course, this may not be an option if the business has no debts, but I've yet to meet someone with a debt-free business and very bad personal debts

HTH

wolfers

Thanks for your comments everyone.

The advice to keep the limited company and get a friend to be the director/shareholder was actually made by the IP recommended by my accountant. So I'm extra confused now :S

Maybe I put the limited company on ice for a year and act as a sole trader during my bankruptcy year? I don't know.

What does "being involved in the management of a company" mean?