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SimonSimon2011
Starting Member
United Kingdom
6 Posts |
 Posted - 02 June 2011 : 22:28:51
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| Just petitioned personal bankruptcy - worked for years as independent consultant via limited company (80% shareholder - wife investor and 20%) - taken income as dividend not PAYE - Company profitable, has ongoing client paying monthly, plus potential new clients in negotiation - I am primary resource (sometimes work with associates) do not accept deposits rather invoice for services (mainly man hours) as delivered - have resigned as a director and signatory (wife now sole director and signatory) - most likely immediate source of income for me is via the Company (finding employment will be difficult having worked independently for so long) - believe it is in the best interests of creditors to continue working at Company - fully understand I cannot be involved “directly or indirectly in promoting, forming or managing a limited company, or acting as a company director, without the court’s permission, whether formally appointed as a director or not” - issue is around the word “promoting” - I could not (and would not) be involved in “promoting the Company” in an ‘FSA’ sense of selling shares or investment in the Company, or indeed seeking any form of funding (which the Company does not need or want) - the “promoting” I wish to ask about is in the product marketing sense talking to potential clients about what the Company could offer i.e. “marketing the services that the Company offers” - without that there will be no new revenue - asked my Examiner but he told me he was not allowed to advise me on interpretation (i.e. he could not comment on the word “promoting”) but said that I should form my own interpretation or seek advice - what exactly are the parameters of “promoting” in this context in order to know precisely what I am (and am not) allowed to do so as not to breach the conditions of my bankruptcy |
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debtinfo
forum expert
2826 Posts |
Posted - 02 June 2011 : 23:07:57
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ok back up a bit, wife is now sole director,
What does she do in the company, what do you do?
also what is the position of the business, assets liabilities etc, as the OR now owns 80% of the company and may wish to sell those shares at some point |
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SimonSimon2011
Starting Member
United Kingdom
6 Posts |
Posted - 04 June 2011 : 10:41:39
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Wife is investor (ie she put working capital into the business) and active joint participant in strategy, business management, pricing, marketing, sales, administration, accounting etc. (but not usually delivery of services) - she was also already a director of the Company alongside me well before my bankruptcy i.e. she did not become a director in order to replace me (my resignation changed her status from 'co' to 'sole' director)
I am the principal resource and asset of the company as management consultant and trainer - also the Company's sales activities almost exclusively rely on my extensive network of business contacts
We do sometimes work with Associates (generally also independent consultants) with whom the Company shares revenue on particular projects - the Company does not though commission services for clients (i.e. we do not take clients money and then engage sub-contracted services, it is all delivered as a single service invoiced solely and directly by the Company)
I worked as self-employed (again management consultant and trainer) from 2000 until about five years ago when the Company was set up because a client for an interim assignment insisted that they would only deal with limited companies not individuals - since then all my work has been "booked" through the Company - I have, though, hot been "employed" by the Company as I have taken my income as dividend
Company has only a few asssets (basically couple of computers with peripherals and some filing cabinets with no premises or stock) - Company's revenues are solely generated by my activities (both sales and delivery) ie "no me = no revenue" - thus shares worthless without my active participation
Existing contract around commission only sales could potentially generate substantial (ie £10K's if not over £100K) revenue from a single deal alongside current hourly rate contracts that are currently delivering £K's per month but have in a good month delivered £10K's)
If the Company is wound up (or even proceeding are
commenced) terms of trade mean that clients do not have to pay invoices (currently over £20K of invoices outstanding)
I do not believe that I could realisitically command the hourly rates (and thus potential overall annualincome) that I could achieve (and have achieved) through the Company to date as an employee of another business |
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debtinfo
forum expert
2826 Posts |
Posted - 04 June 2011 : 17:01:44
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| So say for instance she wanted to take the company in a totaly different direction (perhaps with a differnt employee bringing other contacts and skills to the table), she would be able to do that and you would have no input into that decision at all? |
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SimonSimon2011
Starting Member
United Kingdom
6 Posts |
Posted - 04 June 2011 : 20:22:34
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| In principle, yes, correct - but, whilst she is the sole director, she is a minority shareholder with (if I have interpreted your previous comment correctly) the Official Receiver as the majority, and thus controlling, shareholder ... |
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Bigal4787
forum expert
United Kingdom
641 Posts |
Posted - 06 June 2011 : 00:02:19
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Hi,
the OR as trustee may be the controlling shareholder, but assuming that the company is not listed then it may be difficult for the OR to deal with them, as the company may have restrictions placed on the transfer of shares in the company.
Having resigned as director of the company, where you would have fiduciary duties but resigned them, then as an employee it would be necessary to ascertain that you have placed yourself in a position where you must act solely in the interests of your employer, i.e your wife, not the company, that way you are hopefully showing that you are not involved in promoting, or directing the company, simply working in the interests of your wife as employer.
Big Al
Insolvency examiner with the Insolvency service from April 2008 - July 2010.
If you need help completing SOA's(statement of affairs) or PIQ's(preliminary information questionnaire) if you've been declared bankrupt, or anything else and you're within 30 miles or so of Warrington, then please contact me via my contact details in the expert page for futher details"
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SimonSimon2011
Starting Member
United Kingdom
6 Posts |
Posted - 06 June 2011 : 09:29:06
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Are you suggesting that I be employed directly by my wife (ie employment contract with her) or employed by the Company (employment contract with the Company but enacted by my wife in her role as director) ?
If the latter, I would have to act in the best interests of the company because the Company was my employer (albeit enacted through my wife thus she would be my de facto "boss")
If the former, would she be able to pass on to the Company the costs of employing me or would she have to fund it out of the return (ie dividend) from her 20% shareholding ? |
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Bigal4787
forum expert
United Kingdom
641 Posts |
Posted - 06 June 2011 : 14:26:20
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In the cases I dealt with involving husband and wife director's where one went bankrupt, the bankrupt one simply became an employee of the solvent one, you only have to do it for 12 months while the restrictions are in place, unless the OR feels there are grounds for FI(further investigation) in seeking to extend the restrictions from 2 - 15 years, I'm assuming that there aren't any grounds.
Big Al
Insolvency examiner with the Insolvency service from April 2008 - July 2010.
If you need help completing SOA's(statement of affairs) or PIQ's(preliminary information questionnaire) if you've been declared bankrupt, or anything else and you're within 30 miles or so of Warrington, then please contact me via my contact details in the expert page for futher details"
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SimonSimon2011
Starting Member
United Kingdom
6 Posts |
Posted - 06 June 2011 : 19:43:41
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Just to clarrify you say "became an employee of the solvent one" - do you mean 'personal employee' or 'company employee' ? (as per last question above)
Also, in terms of the element of "promoting" the company - does that mean I can do that as an employee - specifically can I be "the face" of the company ie on website and in terms of contacting potential clients etc. ? |
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debtinfo
forum expert
2826 Posts |
Posted - 06 June 2011 : 22:09:21
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| basically potential clients should not be under any illusion that it is your company or that you run it, If they are given that impression then you are breaking that rule |
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SimonSimon2011
Starting Member
United Kingdom
6 Posts |
Posted - 08 June 2011 : 09:07:06
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I discovered that there was an advice desk at the High Court: Bankruptcy Court Advice Service
http://www.hmcourts-service.gov.uk/cms/14612.htm
Having spoken to them it is clear that because I was an integral part of the management of the company before my bankruptcy, continuing to work with the company risks having it appear that I am involved in the management of the company (irrespective of whether I actually am in fact or not) - even that "appearance" would breach the rule
I am thus going to go back to being self employed and not work with or through the company |
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Just petitioned personal bankruptcy
