Can a director do this?

System
System Posts: 100,537 🤖 Admin 🤖
edited June 8 in Student general
My boss is 65 and has said a few times that when he decides to finish he will take all the money out of the bank accounts and not pay our suppliers or our redundancy money.....Can he actually do that? Its a limited company but surely he cant just do that.

Any advice is gratefully received :?

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Can a director do this?

    Sounds very much like 'wrongful trading' to me;

    http://www.streetsweb.co.uk/wrongful trading.html

    Edit; on second thoughts, it's probably more 'unlawful trading' if it carries deliberate intent, though, having read the article, the burden of proof is very high for this to be successful. The way I understand this, is that if found guilty, any traceable property or investments he owns could be seized and sold to repay back the company's debts.

    http://en.wikipedia.org/wiki/Fraudulent_trading

    Edit; on third thoughts, depending what he actually did, wouldn't it be a case of pure and simple theft if he took more than just his fair share of the ownership?! Therefore, this might be the best link for him;

    http://content.ytmnd.com/content/d/f/f/dffdc819b984b909ab42323bc9686841.jpg

    Sounds like a lovely man to work for, doesn't he? Sure he's not just winding you all up?

    Regards,

    Robert
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Can a director do this?

    He can do it - but not legally. :cry:
    Happens all the time. depends if he wants to be able to sleep at night!
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Can a director do this?

    The companies act does prevent directors from doing things to the detriment of creditors. If your boss does this then it is clear he will be acting to the detriment of the creditors - otherwise known as unlawful trading with a potential theft charge thrown in for good measure. In certain circumstances this can carry a prison sentence under the Money Laundering Regulations (another set of rules [albeit not in statute]))

    The fiduciary duties directors have under the companies act are to act in the best interests of the company - they have no choice in this. Limited liability only protects them if they HAVE acted in the best interests of the company. The company's funds are not the directors (despite common belief that they are) and a lot of directors think the limited liability status of the company protects them. It only protects them in the event of circumstances beyond the directors/shareholders control. If your boss did take all the money and did a runner the creditors and staff could pursue him personally and there would be nothing in statute to protect him. He would either (a) have to repay the money or (b) sell his personal assets to make the funds available in order to enable the company to meet its obligations with creditors.

    Hopefully your boss has said this "tongue in cheek".

    Kind regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Can a director do this?

    He WAS a lovely man and I have worked for him for 16 years but in the last 5 years he has become more and more bitter. Us in the office are finding the contracts/work and he just take the profit when it there and when it isnt he tell us and the men on site that he will leave us with nothing and he has said this quite a few times. I like the people I work with and we see very little of him and we have always been paid on time, so just incase he ever did follow his threat I enrolled on the AAT course just to cover my back side. This type of situation makes unhappy working life :(

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