Banks carry out credit checks on previous company directors?

breaktwister

Hi all,

I have a very poor credit file caused by defaults as i ended up carrying all my other halfs debt when we split up.

I now wish to operate my own ltd company but have been refused a basic account by my own bank who I have always kept payments up with.

I have already set my company up with me as a director. If a new director was to be put in place instead of me will the banks look at previous directors and credit check them upon an application for a business bank account?

If so, I'll just have to bite the bullet on that company and incorporate a new one with no mention of me!

I just want to add that it's an utter disgrace that banks can pick and choose who they allow to access basic banking facilities. I don't want any credit from the bank, just the facility to take in payments from customers and make payments out. How come the banks get to decide who can setup a business?

Paul_01

They're not deciding who can set up a business, they are choosing who to offer services to. Its their call if they don't wish to offer you any one of their services.

There are a couple of recent ish threads on which banks offer the best basic business accounts, so if you do a search you may find some better direction.

Paul_01

This may do the job.

http://www.natwest.com/business/products/business-current-accounts/foundation-current-account.ashx

jonesMUFCforever

Can you see why they have refused you?
You have a poor credit rating. End of: it does not matter how it came about.
You now want to set up a Ltd company account - should it go belly up who pays?
Why not set up as a sole trader first - then if things go well change to a limited company?

olly300

jonesMUFCforever wrote: »

Can you see why they have refused you?
You have a poor credit rating. End of: it does not matter how it came about.
You now want to set up a Ltd company account - should it go belly up who pays?
Why not set up as a sole trader first - then if things go well change to a limited company?

I don't know what sector the OP works in but in some sectors you cannot work as a sole trader. This is mainly to do with laws around how you get work and who your clients are. (There are also sectors were you cannot work as a limited company.)

The OP was given a link to Natwest who do a business account for people with bad credit rating so he is better investigating it. Just a warning he may have to be pushy with Natwest as they don't make money from such accounts.

Also while he can use another person with a good credit rating as a director for the bank account, legally he will be considered a shadow director as he is running the company. This looks suspicious and depending on his clients they may refuse to deal with him.

jonesMUFCforever

Hardly likely to be a solicitor is it?