All three UK directors are no longer listed as directors on Companies House?

Are they protecting themselves in some way in case of insolvency? The company has had some lean times recently… How worried should I be?

CV polishing time? 😉

How is the company listed? PLC LTD partnership or soletrader, the implications are very different depending on the co status

It’s a ‘PLC’. That’s all I know…

Restructure is most likely.

Resigning doesn’t necessarily absolve you of liability anyway.

PLC’s are shareholder owned so directors have no direct liability for company liabilities, infact a PLC doesn’t need a ‘director’ as within a plc its just a job title.

OK, thanks. I think that’s satisfied my curiosity 🙂

Are you just making this up as you go along hustler? 🙂

All (well ok, almost al) companies are member owned. Director is a role, for which you can most definitely incur liabilities.

Wrongful trading, to which the OP alluded, is the most obvious example.

It is of course possible to be a member and director, which is common with smaller Ltds. Therefore you have liability as a member (to the extent of your shareholding) and any liabilities you may have opened yourself up to as director.

I think it’s a restructure. The sole director is now a stateside based individual who is overseeing a few changes. He’s a recent listing.

Yeah, don’t worry, i’m willing to bet that’s the case (particularly for a plc).

We’ve got upwards of 50 companies (in various guises) that I’m continually restructuring for a number of generally very boring and benign reasons.

peterfile role of a director varies

in a ltd co the directors are ‘generally’ (but not in every case) the owners of the company and depending on the companies finance structuring their personal assets can be chased for company lialbilities (ie second mortgage on home to secure business loan etc). In this scenario it is very dificult to resign as a director without cetain approvals particularly if a company is in dificulties

In a PLC generally the ‘title’ director is given to someone who heads a division within the co ie finance new products IT, they will generally have no financial tie in to the company other than maybe share holdings so its a role much easier to depart

You’re honestly just making this up.

(i think you’re confusing the job title “director” that some companies give to their employees to make them feel important, with the role of a company director, e.g. Director of Stationery Supplies)

No I’m not my wife and I are directors of our own co when we bought our business 12 years ago part of the loan was secured against our house and until the loan was repaid if we’d got into difficulites then the bank could have chased our house as an assett.

Similarly a friend workred for a packageing co that went bump a few years ago, shortly b4 the end a couple of the owners tried to get out of directorship to avoid futer censorship from becoming a director in the future, the IR spotted this and they failed……

OK then, cheers for the heads up, I’ll do a bit of research and try to remember all this when I get back to work on monday. Will probably come in useful at some point!

PLC’s are shareholder owned so directors have no direct liability for company liabilities, infact a PLC doesn’t need a ‘director’ as within a plc its just a job title.

PLC’s are Public Limited companies that are owned by shareholders. Whilst some businesses will have directors that are only job titles ie Sales Director, they still have a board of directors who have the same legal responsibilities as directors of private limited companies. The directors of private limited companies are normally (not always) the shareholders as well, where as PLC shares are owned by thousands or millions. These shareholders have the power to decide who the board of directors are.

The board of directors at a PLC will normally have a shareholding and their bonuses may be paid in shares. So whilst their house may not be at risk if the PLC goes wrong, they could still loose hundreds of thousands. For example the Lloyds Bank chief executive Antonio Horta-Osorio received a bonus of £1.7m in shares, which are deferred until 2019. If the business did fail he would loose all of that.

actually, flippidy, when you say they are not listed as directors on CH, do you mean for that company or at all?

Do a search by name and see if you can find them listed under another (perhaps newly formed) company.

If all three no longer hold directorships anywhere in the organisation then that is more unusual (although will generally still have a completely normal reason rather than one you should be worried about). Could mean an international restructure (e.g. they’ve picked up their director roles under a company registered in a different country but within the same organisation. That wouldn’t show up on CH).

If you’re really worried, email me the names/company and I’ll try to unravel it for you when I’m back in the office.

(btw, it could of course just mean they no longer want to work with the company or have been sacked…but being a plc this info is normally made available quite quickly! You would find it via google no doubt.)

Well there’s not a lot of transparency at the moment and there are quite a few of us minions wondering what’s going on…

We know it’s not been performing in terms of sales. But beyond that it’s a bit of a mystery.

I’ll drop you a line peterfile. Many thanks.

LOLZ @ peterfile

LOLZ @ peterfile

+1

And, I’ve just clicked on the website in your profile, Peterfile. How on Earth did you get that girl to pose for a photo whilst zipped into a bag? She looks almost happy to be there too. It’s a truly bizarre image.

I can be quite persuasive Orman (although this thread clearly demonstrates otherwise!) 🙂

You’re honestly just making this up.

+1

in a ltd co the directors are ‘generally’ (but not in every case) the owners of the company and depending on the companies finance structuring their personal assets can be chased for company lialbilities (ie second mortgage on home to secure business loan etc).

For very small family companies maybe. With SMEs in most cases the Directors represent the funds / institutions which invested in the company and as individuals have no personal investment / financial relationship (and are quite often not even paid for being a Director).

https://www.iod.com/MainWebSite/Resources/Document/dutiesresponsibilities_1006.pdf

Three types of directors, you will find different ones in different companies.

Executive directors, in ALL companies are liable by law for the actions of the business, and can go to gaol for the actions of others. Ltd/PLC removes the financial responsibility but in a small company banks may well ignore and demand the directors offer personal guarantees.
Non Exec directors, there too offer guidance. and in some ways are more important than the exec directors even though they may not be paid, (expenses don’t count), they decide pay, who the exec directors are (share holders can only do so much)
Appointed directors, honorific sales.marketing means nothing.

Ltd/PLC removes the financial responsibility but in a small company banks may well ignore and demand the directors offer personal guarantees.

-1 to footflaps

The hustler, it may be that you do know what you are talking about but your posts give the contrary impression in any company PLC or ltd the directors have no personal responsabilty unless they engage in fraudulent or wrongful trading . Banks know this which is why for small to medium business they always insist on personal guarantees.

Wrongful and fraudulent trading are not the only way of personal liability bring applied.

Go on what are the others ?

as said above when purchasing a business or taking a loan in for the business a personal guarantee can be asked for.

There is nothing wrongful or fraudulent in this

plus the being a director – office bearer (I’m thinking company secretary) – whilst trading as technically insolvent. This was close to happening with the first very small company I joined (I was not the C S or a director, I may add).

Ltd/PLC removes the financial responsibility

No it doesn’t, not in the sense you think it does.

I think a couple of basic principles are being confused here…the role of directors and security given by people who also happen to be directors.

At a basic level, there are two “positions” available to people within a basic corporate structure – members (shareholders) and directors.

They are completely different, but in small Ltd companies will often be filled by the same person, which is what I think is causing the confusion. The members contribute the share capital and “own” the business. Their liability financially is (usually) limited to the amount of called up share capital that they have contributed.

A director is appointed to direct/manage the company. The nature of corporate entity (whether ltd or plc) doesn’t “remove” any financial responsibility as such from the directors.

What you are (I think) trying to explain is a situation where a small business owner decides to incorporate his business in order to benefit from the perceived protection an Ltd would offer him from creditors.

However, in fact, as you’ve correctly identified, the banks are not completely stupid. They will not lend to a newly formed company with no assets over which they can take security. An Ltd is a person, and that person is a poor one if it has no assets. Banks don’t lend to poor people without some form of security. So they take security from the only person who would be willing to give it – the guy who just set the company up and is the sole director and sole member. It is almost unfathomable that a bank would ask for a personal guarantee from a director who was not also a shareholder. They are not asking for security from him as a result of his position as director, merely because he also happens to be the only person with an interest in the company.

Also, I can absolutely assure you that directors can incur personal liability in relation to them acting as directors. It’s a limited set of circumstances, but it can and does happen.

Hustler that is what I said . kcal that is wrongful/fraudulent trading .
Peterfile puts it better than I. But basically a ltd or public company is a separate legal person as a general principal its debts and liabilities stay with it not it’s directors.

Misfeasance, transactions to defraud creditors

2 ways you can be personally liable for the debts of a company:

1. You give security in respect of them; or

2. You are a director and are very naughty.

Number 1 doesn’t actually have anything to do with you being a director, it is possible for your granny’s next door neighbour to give a personal guarantee in respect of your company, but obviously there’s no way she’d do that, the only person who would is you…oh and you also happen to be the director. Personal guarantees are not related to being a director, it’s just common that the people who give them are the directors of the companies they are guaranteeing.

Personal guarantees often lead to further problems in insolvency for people who give them and then pay them off in preference to other creditors with company money.

Ltd/PLC removes the financial responsibility
No it doesn’t, not in the sense you think it does.

badly worded on my part, a sole trader is the business is the person there is no differentiation.

Incorporation creates a new entity and the director is not legally the same as the business. They are not legally liable for the business. In the event the business goes bust they can not be chased by creditors. Because of this banks will commonly demand a personal guarantee from the directors before giving a loan.

This is part of the reason for the piss taking phoenix businesses you commonly find in the building trade.

hustler should probably change lawyers and certainly learn more about what is “normal” in business before dishing out advice to others.

With respect Poly you should really learn about reality tell me one business you know of that had quite a high start up cost or wants major recapitalisation where the directors wouldn’t be asked for guarantees……………..if you cant then the opposite is obviously the ‘normal’

I think the confusion has arisen because various posters have experience in setting up their own Ltd, which brings with it a set of unique and often contrary procedures compared to the rest of the corporate world.

It all comes back to the fact that a small business setting up under an Ltd will have nothing worthy of security behind it, so any debt it wants to get into will ultimately fall back personally to the people who set it up. This can distort the perception of what a shareholder and director are liable for. What you are liable for a director/shareholder under law is vastly different for what you agree to be liable for personally.