Should I accept Director Position..are these potential red flags?

JBEAN

UPDATE…..thank you for everyone’s useful advice.  I have passed all your comments to my sister, and she has decided t9 open her own account and continue the business in her own name independently of the previous director.

TWO more questions please…

1.  how does she remove her name as Director?
2. What should she now do about paying the Tax and NI that he hasn’t paid on her behalf for the last year?



am posting this on behalf of my sister as I suggested to her this was the best place to seek advice as I know there are a lot of knowledgable people on here.  Her situation is causing her a lot of stress and uncertainty and I feel there are things she should be concerned about but we would both be very grateful for advice…

Sorry it’s very long..lots of issues we feel need addressing…



I have been employed by a man who runs a cleaning company, for the last year 

Last month he decided that he no longer wanted to run the business, and said he was making me Director of the Company

There is just myself and my daughter working at the company at this time.  

He said unless I became a director of the company he was closing the business and myself and my daughter would lose our jobs 

He gave me the weekend to decide and I felt I had no option but to accept the directorship as we can’t afford to lose our jobs and we enjoy what I do

My concerns are:

1. I  have never been a director …. What’s the easiest way to find out what this involves? 

2. I am showing as a director in companies house but I haven’t actually ever received any paperwork from him /signed any documents 

3. Should I keep the business as a limited company or would it be easier for me to be a sole trader

4. He has an online bank account for the business (Tide .. not a high street bank) but so far i don’t have access to it.  I have emailed them but they said he needs to speak to them. I think he has tried but they are hard to get hold of.  In the meantime clients are contacting me saying they are unable to pay or their payments are being returned by the bank

I know that there is money in the account and am worried about whether there will still be money in the account when I can eventually access it 

5.  He hasn’t paid any tax or NI for for the last year (since I was employed by him) and says the business needs to pay for it? 

6.   I am concerned about the business accounts as clients are calling me asking for invoices but I can’t give them bank details as I don’t have them yet.  Should I get a new accountant as the existing one is associated with my former employer who I suspect is a bit chaotic with paperwork and running businesses.  

I have never received from him a contract when I was an employer.  Nor has he ever asked me for any of the receipts i have relating to business expenses in the last year.  Plus I don’t want him particularly knowing anything from the accountant with regards to the business. 

7.  How can I be sure that he/the business doesn’t have any debts??

We would be grateful for any other things we should consider, that we haven’t mentioned 

On-the-coast

It might all be ok… but so many red flags. 

She needs to engage professional advice asap - an accountant - preferably one who’s been signing off the accounts. This can be expensed to the business - though if they refuse to take on the job you’ll have an indication that they think they are not going to get paid!

Being a limited company would protect her personal assets to an extent, but as director she would have legal responsibilities…

Hoenir

You can be a manager of a business without the legal responsbilities of being a Director. Walk away. There's far more going on than is being told. 

FlorayG

This man is a crook and i think has signed you up to his crooked dealings. Best wishes, I hope it turns out OK for you

Emmia

If you want to be the director of a cleaning company, set up your own business properly from the get go, don't take over this shambles.

Marcon

JBEAN said:

I am posting this on behalf of my sister as I suggested to her this was the best place to seek advice as I know there are a lot of knowledgable people on here.  Her situation is causing her a lot of stress and uncertainty and I feel there are things she should be concerned about but we would both be very grateful for advice…

Sorry it’s very long..lots of issues we feel need addressing…



I have been employed by a man who runs a cleaning company, for the last year 

Last month he decided that he no longer wanted to run the business, and said he was making me Director of the Company

There is just myself and my daughter working at the company at this time.  

He said unless I became a director of the company he was closing the business and myself and my daughter would lose our jobs 

Become a director of this company and you could lose far more than your job...

He gave me the weekend to decide and I felt I had no option but to accept the directorship as we can’t afford to lose our jobs and we enjoy what I do

Repeat: Become a director of this company and you could lose far more than your job...

My concerns are:

1. I  have never been a director …. What’s the easiest way to find out what this involves? 

Proper training and professional advice.

2. I am showing as a director in companies house but I haven’t actually ever received any paperwork from him /signed any documents 

If you've agreed to be a director you've given him your agreement to file the necessary confirmation at Companies House.

3. Should I keep the business as a limited company or would it be easier for me to be a sole trader

Why would you want to accept unlimited personal liability?

4. He has an online bank account for the business (Tide .. not a high street bank) but so far i don’t have access to it.  I have emailed them but they said he needs to speak to them. I think he has tried but they are hard to get hold of.  In the meantime clients are contacting me saying they are unable to pay or their payments are being returned by the bank

You're being fobbed off - and you know it

I know that there is money in the account and am worried about whether there will still be money in the account when I can eventually access it 

Repeat: You're being fobbed off - and you know it

5.  He hasn’t paid any tax or NI for for the last year (since I was employed by him) and says the business needs to pay for it? 

It certainly needs to be paid by the employer - and it sounds as if he's been failing to report and pay using 'Real Time Information' 

6.   I am concerned about the business accounts as clients are calling me asking for invoices but I can’t give them bank details as I don’t have them yet.  Should I get a new accountant as the existing one is associated with my former employer who I suspect is a bit chaotic with paperwork and running businesses.  

I think you've answered your own question...

I have never received from him a contract when I was an employer.  Nor has he ever asked me for any of the receipts i have relating to business expenses in the last year.  Plus I don’t want him particularly knowing anything from the accountant with regards to the business. 

So you want to hide things from him? Why?

7.  How can I be sure that he/the business doesn’t have any debts??

Proper and thorough due diligence - although it's a bit late in the day for that.

We would be grateful for any other things we should consider, that we haven’t mentioned 

Resignation - pronto.

penners324

Becoming a director gives some personal legal obligations.

However, who owns the business?

Not paying paye for a year is a massive red flag. However, it's the owners responsibility.

Resignation and set up your own. Take the clients with you

penners324

Also the owner is talking nonsense in relation to the bank.

It takes minutes to add an additional user to a Tide bank account, all done in the Tide app. No need to call them

Elliott.T123

Run away! If he plans to close the business then start from scratch, tell your sister to speak to each client she cleans for and say that Mr XYZ is closing down the company however she is going to continue and will be more than happy to continue cleaning. 

That way she can do the same thing but without any worries around someone else having control and potentially having a shady business she would be caught up in.

Marcon

penners324 said:

Becoming a director gives some personal legal obligations.

However, who owns the business?

Not paying paye for a year is a massive red flag. However, it's the owners responsibility.

Resignation and set up your own. Take the clients with you

Actually it's the responsibility of the directors (who run the company), not the shareholders (who own the company).

DullGreyGuy

Back to first principles... are you just becoming the director or also a shareholder? What percentage of the company is being given to you?

If you are just a director and not a shareholder that is a very different position to being both the director and the shareholder.