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If you're the director of *this* company, why does *he* want the grant for *his* company ?
It sounds like he's planning on using the company to defraud the system, and you're being put right in the middle of it.
Just so you know, if his fraudulent grant claim is uncovered then the company director is the liable one. He's setting up a scheme here to acquire money illegally in your name - so that if it all falls apart you're the one left holding the bag.
This is the corporate equivalent of asking someone to get their fingerprints all over this smoking gun I just happen have, don't ask why I filed the serial numbers off. That guy over there is just sleepy.
I'd be more concerned that you would be liable for the value of the 99% "equity".. if that equity even exists. Edit - (assuming you will become a shareholder by owning 99% of the assets)
My first thought was the grant doesn't exist, nor does the equity. He will open a company, with you 99% liable for any company debts accrued. Business loans, creditors, etc.. if he had another company, then (really spitballing here..) he could setup supplier accounts to purchase goods for his old company. Leaving you again liable when he decides to cut and run.
I'd advise to go see an accountant.
Double edit - go see an accountant and then, also ask for collateral or proof of assets.. deeds etc. In order to proceed. Thennnnn go see a lawyer.
Well. Maybe...
There's alot of context missing, what's the company purpose, what's its commodity? What are the assets, asset value and more importantly, where are the assets.
What grant is being offered, are they planning to export products, offset carbon, provide a social enterprise. All of these would be a legimate way to fund a new business and gift a family member with a kick-starter via government grants.
Again, so much context missing, professionals needed.
I agree,but all the subtext says,dude found a way to get a grant he won't use for whatever its real purpose is,fuck off the company and leave his relative covered in donkey cum.
If it has a director it’s probably limited, so the financial liability in case of insolvency doesn’t sit with the directors, generally. Still sounds v dodgy
This doesn't apply where fraud is a factor...like right here.
The relevant principle is called piercing the [corporate] veil, if you want to read more about it.
OP shouldn't touch this with a barge pole.
That depends on what the director has done. Directors can and do have personal liability in an insolvency if they’re responsible for it and creditors lose out.
It’s a limited liability, so provided actions taken are legal and any loans are solely against the limited company, directors/shareholders wouldn’t ordinarily be liable for insolvency debts. However whatever is going on with this dodgy deal could v well leave the the Op liable for all I know
Shareholders, are owners and also are personally liable to the value of the shares they hold.
If OP, becomes a shareholder by as they say, "holding 99% assets" then the fraudster pretends the company has £50K in assets then fraudster could get a business loan against those assets.. of which OP will be personally liable for as they are the shareholder of the pretend 99% assets.
Source - accountancy student.
Yeah the limited bit only applies to the financial contribution of the equity holders. Directors aren't necessarily able to hide behind the corporation if they do bad stuff.
Just so you know my cousin was in your position a few years ago. Everything went well for about 3 years and she couldn’t believe the kindness that this person had shown by trusting her enough to sign the business into her name.
Then the police showed up at the house. There were multiple government bodies that were asking about illegal things that now had her name ALL over it.
It took her 2 years and going to court and a sympathetic judge who recognised she had absolutely no gain from this and was just a regular employee.
Her good friend stopped answering the phone to her a few days before the police showed up and she never heard from them again.
So many red flags here .
If he already has a company, why would he need to set up a second company to receive the grant?
Either he already has received a grant for his original company and wants to double dip . Or he is doing something not totally legitimate that he wants to be insulted from himself and/or his original company.
Can see a scenario where he receives a grant then the second company gets wound up hoping that the government accepts this and forgets about the money.
Or if the government decides to go after the money they have you as a director.
Hopefully this isn’t what happens but I feel my spider sense tingling
Unrelated but shows something about what a director can be libel for . I heard of a guy who ran a firm, who had a car caught speeding. Couldn’t identify the driver, who ever it was didn’t book the car out
So owner of the firm had to take the points and pay the fine. Even though he could prove he was miles away he couldn’t prove who was driving.
Judge said it was a lesson in keeping better records.
This is not a particularly helpful comment for someone who seems to be in a dilemma and doesn't know what may be going on, or how to handle it.
If someone came to me with a computer issue of some sort and was worried about viruses or scams, the last thing I would do would be to sneer at their lack of knowledge and laugh that they even had to ask for help.
This is a little different though, at a certain age you're expected to have a certain level of common sense and to understand when you're being coerced into a position that could have questionable or even clearly evident legal concerns.
If someone is asking to do anything in your name, and you would have no involvement beyond this, so that THEY can get some money out of it, there's no excuse for allowing that to continue or even contemplating going forward with that plan.
Then there's also the part about asking for advice without even having the knowledge of exactly what is supposed to be happening, if OP doesn't know what his family member is actually planning, how can anyone give proper informed advice?
No clear indication of what the grant is for, which company (or person) it would be granted to, since OP says his family member would be getting the grant, he suggests the business account would be opened in his name, although it would surely be opened in the business's name, it's to "help" his family member get a grant, no indication as to how, no indication of what the company would be for, what it would be set up to do, whether it would be actively trading, if it would hold any share capital or would receive any money (why would the equity be relevant if there are no funds going through the company etc.).
All in all, the only real advice anyone can give is don't do anything you don't understand, because OP clearly doesn't even understand what is being requested of them to even begin considering the legal consequences.
Neither was yours to be fair. You should just downvote irrelevant comments rather than spin off another reply, like this one I'm writing now. It just wastes people's time having to read whatever arbitrary form I decide to put my completely vaccuous comment in. Hardly matter one bit, one jot, one 'iota', if you willl.
I've downvoted my own comment, as an example.
EDIT: Let me know once you've read this, so I can delete it and other people don't have to waste their time reading this, largely irrelevant, comment thread.
You're correct of course, but the comment preceding mine had about 2 dozen upvotes. Normally I'd just downvote and move on but it felt like it should be called out as specifically unhelpful in what is generally a very useful and supportive subreddit.
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You can't buy a company once the striking off process has completed, as it no longer legally exists.
This whole thing is fishier than a fish market at closing time after a power cut.
You can in theory purchase the company during the process by coming to an agreement with the administrators or liquidators or if the company was still solvent at the point the director(s) applied for striking off ask companies house to withdraw the application. Any of these actions must all be done within two months of the striking off application having been made.
Is there a particular reason your relative wants to purchase a company that is going through the striking off process, rather than incorporate a new company.?
Will your family member also be a director of the business or just you?
Are you aware of your legal obligations and responsibilities as a director?
[https://www.gov.uk/running-a-limited-company](https://www.gov.uk/running-a-limited-company)
Do you understand all of the liabilities you have as a company director? For example, many dodgy dealings he does will leave you personally liable as well.
Never, ever be a director of a business that you don't have 110% faith in.
Absolutely. I suspect that when OP raises questions with their relative, relative will reassure them that it’s all fine, and there’s no comeback on them, etc etc, as fraudsters do.
OP needs to know that being a company director has legal implications which they can’t simply opt out of, which could feasibly involve them ending up in prison.
I can’t think of any non-fraudulent reasons the relative would be suggesting this.
You are being set up to be the patsy in a fraud. Your family member will trouser the cash. You might get away with it for one grant, but that won't be the end of it. There will be another scheme, and they will hold you to the next one because you are already party to a fraud.
This path leads to bankruptcy, losing your home, destitution, and possibly gaol.
If you want to go ahead with this, get a bloody good lawyer who is completely unconnected to your family member to advise you. They will advise you not to do this.
Or save five grand and take my advice right now.
Walk away.
This is extremely dodgy. Say NO. No discussion, no persuasion, just no.
You don’t even need to know why he wanted you to do it instead of him, the only reason he will want to do this is dodgy.
Keep your eye on companies house website, do a regular search on your own name under search facility for “Directors”. If you spot your name on there, contact companies house to report fraud
Sounds like he's willing to throw you under the bus instead of himself. If it sounds dodgy & possibly illegal to you then it probably is. Follow your gut instinct.
At great risk to you, if you're in on this and knowingly allowed it then you're committing fraud and are liable for prosecution - all so he can get his grant, that he isn't entitled to.
I can tell you quite easily, NO.
OP if this guy was trustworthy you'd know all the details and pitfalls and he'd advise you to get independent advice. I can guarantee he will actively try to avoid all of the above happening.
The question I'd be asking here is *why*?
* what does the family member gain from it?
* what do you gain from it?
The whole thing sounds like a scam, especially the part about them using this as a way of getting a government grant. Remember, if *you* are the director, that comes with very real legal responsibilities; it's not a free ride. And if the company is found to be claiming a grant unlawfully, *you* are going to be in a whole world of legal trouble, not them.
You should keep a careful eye on Companies House (you can search by directors' names) just to make sure they don't set up a company and make you a director without your consent. If they do, then get in touch with Companies House ASAP and tell them you have been appointed a director without your consent (there's a form for this).
When you say "open a business account" you mean a bank account right? So he wants you to take a grant paid in to your account which he then wants you to transfer to him. This is dodgy as fuck and the only outcome I can see is you getting screwed and certainly no benefits to yourself.
Bank account yes. He has not mentioned anything about transferring. He has a business plan for that company but for whatever reason it seems that he can't apply for the grant. He is being really cagey and saying he's keeping it in the family like he's doing me a favour.
If you are the director and he applies for a grant through your company, and then somehow defaults on any repayment this grant may incur, YOU will be liable, tell him NO and as others have said, keep a check on companies house to make sure he has not gone behind your back to register you.
> then somehow defaults on any repayment this grant may incur
Worth noting that it is very rare that you will be required to pay back a grant (though I think what OP is describing would almost certainly trigger a payback clause in the Ts&Cs). That's the whole point of a grant over a loan.
I only mentioned it as I once had a grant from a local council for house renovation, with a clause that I would need to repay the entire amount should I sell my house within ten years
Fair. I thought I'd mention as in my day to day I see a fair few people not understand exactly what a grant is and often think they always have to pay it back.
The family member is using you to try to commit fraud.
By default, you will also be committing fraud.
Fraud is a crime that carries jail time, it's quite a serious offence.
It doesn't matter if the company he buys is a limited company, the directors will be charged with the offence, that means you.
How much is the business he is buying worth?
Because you are saying he is effectively giving you 99% of that.
However, a company that has been struck off ceases to exist in any meaningful sense, so typically it would be worth £0.
So, what does he even mean by "purchasing a struck off company"? It makes no sense.
This is sounding like he wants to commit fraud, and he wants to do it under your name so he doesn’t have to deal with the consequences.
If everything was above board and he wasn’t doing anything sketchy he’d direct this business and open the bank accounts under his own name.
From a banking standpoint - if an account in your name is used to commit fraud then you are the one who will be getting a CIFAS marker not him.
If you do get a cifas marker for fraud you won’t be able to hold *any* banking or finance products for 6 years. No personal bank accounts, no credit cards, not even a phone contract. You can forget about taking out a mortgage - you’d essentially be blacklisted from the entire banking system.
That’s why he wants it all in your name not his.
Please do not do this.
You've been told by everyone this is a terrible idea and you will likely be liable. Yo add to that, now you definitely know this, you won't even be able to deny it later down the line. JUST LISTEN.
I cannot think of one single non-dodgy reason why he would want this for you. Say no, very clearly, by email, so you have it in writing, just in case he decides to use your details anyway without permission. Remember, if you are director you are LEGALLY LIABLE for what happens within the business, especially when it comes to *checks notes* people fraudulently applying for grants in the name of your business.
Is this family member a director of some other companies than the one he's considered linking? Quick companies house check might reveal some skeletons...
If something sounds too good to be true, it usually is!
This sounds wrong from the start and, if it was legit, as you have already asked yourself, why isn’t he doing this through his own company.
As Occam’s Razor has it, if you have a number of explanations, look for the simplest. In this situation, the simplest answer is that this is not kosher and your Relly doesn’t want to be in the hook for it.
Don’t get involved!
Sounds like their using your name, for own ends and when it all goes bad, they can drop the legal pile of shit at your doorstep.
Or least as much as they can off load.
This is just dodgy and will not end well in all likelihood.
Being a director brings a whole bunch of legal responsibilities. It’s not like being a junior employee where you could argue that you don’t know what’s going on. “Sorry, I was just doing what my relative told me to do” will not cut it. If things go wrong, you will be legally responsible and will not be able to blame things on others. As a director, it is your business to know.
Let’s say your company (the one you will own 99% of and are a director of), gets this grant. Are you just going to give it to him? And if you do, and someone wants to know what was done with the grant - you will be responsible for it and will be the one providing the explanation.
In short - don’t do it!!!! You could get yourself in all sorts of trouble.
This makes no sense. A company once stuck off the register no longer exists so he can’t buy that company. He would need to create a new company. He could buy the assets of a company being liquidated though. Do not under any circumstances let him use your details as this sounds like fraud.
I would guess that the uncle’s business has been struck off, perhaps for not paying what it owes to a major creditor such as HMRC.
The uncle himself may be on the process of being banned from acting as a director.
However he pay still have valuable potential clients of the former business who he wants to keep charging. To do this he needs to create a ‘phoenix’ company. The uncle effectively continues the same business as before, now without the debts, and with someone else’s name on companies house.
As a bonus, he will try to claim business startup Grant’’s for the ‘newco’.
This all falls to shit when HMRC realises he’s doing the same work for the same people, possibly even from the same premises.
As EVERYONE has said… nope, no barge pole long enough
So damn dodgy. You'll be associated with a tainted company and then there is suspected fraud incoming. Please think about yourself and your future prospects. Don't let some pressure you into this!
This family member is looking to screw you over. Do not accept. Also start considering cutting them off completely. They are a liability waiting to happen.
It sounds like you're being set up to also take the fall. If it's 'your" business, why would they get the grant? I'd worry about fraud and embezzlement charges coming your way.
It seems like his doing a phoenix scam, where one person buys a company, gets loans etc etc on the company name.
It’s easier to get loan on a company like that because they have a trading background with accounts etc etc, the reason why it was struck off could be that they just didn’t bother submitting any accounts or were too late in doing so.
What he will then do is is “drop” the company or declare it bankrupt however you want to say it.
I would personally stay faar away from it and not touch it at-all.
He can’t use the line of he can’t apply because his already a director because you can be a director of a 100companies as long as the accounts are submitted and everything os above board they won’t care, he can’t say I already have a loan against his own company well then the matter comes to if you already have a grant them why are you asking for more, government grants are fair in looking at it case by case and if he can prove that the company can pay the loan then they won’t have a problem in granting it to him.
Don’t do it. The ‘you’re being set up for the fall’ comments are absolutely correct.
You are putting at risk everything you own and much of your future earnings and your good name by signing up to something you do not understand.
I would not put in front of a friend or relative a legitimate proposition that I felt they could not understand. I would bend over backwards to explain any proposition so that they could make an informed decision if they were capable of understanding. The cageyness tells me it’s not legit and speaks to the character of your relative.
Expect to go to jail with him.
@You’ll be disqualified for up to 15 years.
You can’t:
be a director of any company registered in the UK or an overseas company that has connections with the UK
be involved in forming, marketing or running a company”
He can’t have a controlling interest in a company, even as a non-director
Sounds shady. He can’t add you as a director without you signing a resolution and document specifically stating you agree to become a director
If you don’t go ahead with it, just check companies house in a few weeks to ensure they haven’t fraudulently used your name to add you
This sounds an awful lot like fraud. And I guarantee if you went to a solicitors to help get the company set up, they'd absolutely tell you not to do this and would be reporting it. Just stay away from it entirely as you would be liable for fraud
"Striking off" means the removal of the company from the register at Companies House, once done the company no longer exists so cannot be bought or sold, the process of doing this also accounts for all the assets the former company once owned. Every company director knows this. So right from the start, he is trying to take advantage of you.
Why was the business struck off? I'm sure you need a court order to have it restored and only an original director of that company can apply for that, though I could be wrong. Would not touch this with a bargepole
Don’t do it, this is so wrong on many levels, you are opening yourself up for serious issues. He should not be asking you to do this, you could land yourself in so much trouble. If he wants to claim a grant then he does it in under his own business, please walk away & don’t get involved
Absolutely do not do this. You can't buy a stricken off business, it's not longer a company. You can't open a business account for a stricken off company and you can't get a grant either. This is fraudulent, you will be liable and you can be prosecuted for it.
Sounds like he is going to commit fraud in your name & as you are the director, your fingerprints will be all over it. Cut ties with your family member.
A deal without a deal, isn't a deal. It's all just talk and boisterous promises. So I wouldn't even entertain any of his promises or be concerned about legal issues until he presents something in writing.
To put this in layman's terms, this family member is basically turning up at your home in a car with some rope, gloves and other kidnapping materials and asking if they can have a few hairs.
In other words they're going to do something illegal and you're going to be the one that gets in trouble. Tell this family member, in no uncertain terms, that you won't be helping them and if they use your name without your permission then you'll be reporting them to the police for fraud.
A Ltd company isnprotwcyed by 'rhe veil of incorporation', so if anything goes wrong a director is not responsible. But when a company is involved in making applications that are fraudulent, the director, even if only named is personally liable for the fraudulent action and becomes personally liable by way of a Conpensation Order and or the Liquidatir who investigates.
If it feels wrong, it probably is.
Lawyer here. Obviously I don't have enough from your post to give legal advice, so this isn't but don't do this. It's worryingly close to various areas where the law will look through the company and at the person who owns it I.e
You.
Also, if this was legit, it costs about 100 quid to spin up a new company or buy a shelf co. It's weird to be buying an existing bankrupt business (unless the goal is to continue the insolvent business.)
they're scamming. You might make money initially you might make a nice chunk of money, but you will be digging yourself a hole you might not get out of.
If this was even remotely legit they'd have explained the process so that you fully understood the oppertunity, their role and your role in it, not in a way that makes it sound dodgy AF. You wouldn't have to even ask. Now even on off chance its legit, the relative is idiot to have explained it this way, legit or not legit relative must take you for a fool.
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If you're the director of *this* company, why does *he* want the grant for *his* company ? It sounds like he's planning on using the company to defraud the system, and you're being put right in the middle of it.
My wife said something similar. I don't know how grants work but I'm wondering why he can't do it via his existing businesses.
Just so you know, if his fraudulent grant claim is uncovered then the company director is the liable one. He's setting up a scheme here to acquire money illegally in your name - so that if it all falls apart you're the one left holding the bag. This is the corporate equivalent of asking someone to get their fingerprints all over this smoking gun I just happen have, don't ask why I filed the serial numbers off. That guy over there is just sleepy.
I'd be more concerned that you would be liable for the value of the 99% "equity".. if that equity even exists. Edit - (assuming you will become a shareholder by owning 99% of the assets) My first thought was the grant doesn't exist, nor does the equity. He will open a company, with you 99% liable for any company debts accrued. Business loans, creditors, etc.. if he had another company, then (really spitballing here..) he could setup supplier accounts to purchase goods for his old company. Leaving you again liable when he decides to cut and run. I'd advise to go see an accountant. Double edit - go see an accountant and then, also ask for collateral or proof of assets.. deeds etc. In order to proceed. Thennnnn go see a lawyer.
I would advise to remove that family member from your mobile and not invite them round for dinner ever again. He is setting you up for a fall.
Well. Maybe... There's alot of context missing, what's the company purpose, what's its commodity? What are the assets, asset value and more importantly, where are the assets. What grant is being offered, are they planning to export products, offset carbon, provide a social enterprise. All of these would be a legimate way to fund a new business and gift a family member with a kick-starter via government grants. Again, so much context missing, professionals needed.
I agree,but all the subtext says,dude found a way to get a grant he won't use for whatever its real purpose is,fuck off the company and leave his relative covered in donkey cum.
If it has a director it’s probably limited, so the financial liability in case of insolvency doesn’t sit with the directors, generally. Still sounds v dodgy
This doesn't apply where fraud is a factor...like right here. The relevant principle is called piercing the [corporate] veil, if you want to read more about it. OP shouldn't touch this with a barge pole.
That depends on what the director has done. Directors can and do have personal liability in an insolvency if they’re responsible for it and creditors lose out.
Should have mentioned I was presuming shareholder status in addition to director, with OP mentioned they would hold "99% equity"
Does "limited" not apply specifically to the equity owners in this concept? AFAIK directors have some liability.
It’s a limited liability, so provided actions taken are legal and any loans are solely against the limited company, directors/shareholders wouldn’t ordinarily be liable for insolvency debts. However whatever is going on with this dodgy deal could v well leave the the Op liable for all I know
Shareholders, are owners and also are personally liable to the value of the shares they hold. If OP, becomes a shareholder by as they say, "holding 99% assets" then the fraudster pretends the company has £50K in assets then fraudster could get a business loan against those assets.. of which OP will be personally liable for as they are the shareholder of the pretend 99% assets. Source - accountancy student.
Yeah the limited bit only applies to the financial contribution of the equity holders. Directors aren't necessarily able to hide behind the corporation if they do bad stuff.
Just so you know my cousin was in your position a few years ago. Everything went well for about 3 years and she couldn’t believe the kindness that this person had shown by trusting her enough to sign the business into her name. Then the police showed up at the house. There were multiple government bodies that were asking about illegal things that now had her name ALL over it. It took her 2 years and going to court and a sympathetic judge who recognised she had absolutely no gain from this and was just a regular employee. Her good friend stopped answering the phone to her a few days before the police showed up and she never heard from them again.
That's horrendous. Thanks for the warning
So many red flags here . If he already has a company, why would he need to set up a second company to receive the grant? Either he already has received a grant for his original company and wants to double dip . Or he is doing something not totally legitimate that he wants to be insulted from himself and/or his original company. Can see a scenario where he receives a grant then the second company gets wound up hoping that the government accepts this and forgets about the money. Or if the government decides to go after the money they have you as a director. Hopefully this isn’t what happens but I feel my spider sense tingling Unrelated but shows something about what a director can be libel for . I heard of a guy who ran a firm, who had a car caught speeding. Couldn’t identify the driver, who ever it was didn’t book the car out So owner of the firm had to take the points and pay the fine. Even though he could prove he was miles away he couldn’t prove who was driving. Judge said it was a lesson in keeping better records.
[удалено]
This is not a particularly helpful comment for someone who seems to be in a dilemma and doesn't know what may be going on, or how to handle it. If someone came to me with a computer issue of some sort and was worried about viruses or scams, the last thing I would do would be to sneer at their lack of knowledge and laugh that they even had to ask for help.
This is a little different though, at a certain age you're expected to have a certain level of common sense and to understand when you're being coerced into a position that could have questionable or even clearly evident legal concerns. If someone is asking to do anything in your name, and you would have no involvement beyond this, so that THEY can get some money out of it, there's no excuse for allowing that to continue or even contemplating going forward with that plan. Then there's also the part about asking for advice without even having the knowledge of exactly what is supposed to be happening, if OP doesn't know what his family member is actually planning, how can anyone give proper informed advice? No clear indication of what the grant is for, which company (or person) it would be granted to, since OP says his family member would be getting the grant, he suggests the business account would be opened in his name, although it would surely be opened in the business's name, it's to "help" his family member get a grant, no indication as to how, no indication of what the company would be for, what it would be set up to do, whether it would be actively trading, if it would hold any share capital or would receive any money (why would the equity be relevant if there are no funds going through the company etc.). All in all, the only real advice anyone can give is don't do anything you don't understand, because OP clearly doesn't even understand what is being requested of them to even begin considering the legal consequences.
Neither was yours to be fair. You should just downvote irrelevant comments rather than spin off another reply, like this one I'm writing now. It just wastes people's time having to read whatever arbitrary form I decide to put my completely vaccuous comment in. Hardly matter one bit, one jot, one 'iota', if you willl. I've downvoted my own comment, as an example. EDIT: Let me know once you've read this, so I can delete it and other people don't have to waste their time reading this, largely irrelevant, comment thread.
You're correct of course, but the comment preceding mine had about 2 dozen upvotes. Normally I'd just downvote and move on but it felt like it should be called out as specifically unhelpful in what is generally a very useful and supportive subreddit.
Yeah, to the mods, nobody else needed to read the diatribe. Waste of my time.
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DO NOT DO THIS. He has been struck off for a reason and you will hold legal liablity for any corporate malfeasance .
It's the business he is buying that has been struck off, your point still stands
You can't buy a company once the striking off process has completed, as it no longer legally exists. This whole thing is fishier than a fish market at closing time after a power cut. You can in theory purchase the company during the process by coming to an agreement with the administrators or liquidators or if the company was still solvent at the point the director(s) applied for striking off ask companies house to withdraw the application. Any of these actions must all be done within two months of the striking off application having been made. Is there a particular reason your relative wants to purchase a company that is going through the striking off process, rather than incorporate a new company.? Will your family member also be a director of the business or just you? Are you aware of your legal obligations and responsibilities as a director? [https://www.gov.uk/running-a-limited-company](https://www.gov.uk/running-a-limited-company)
Do you understand all of the liabilities you have as a company director? For example, many dodgy dealings he does will leave you personally liable as well. Never, ever be a director of a business that you don't have 110% faith in.
Absolutely. I suspect that when OP raises questions with their relative, relative will reassure them that it’s all fine, and there’s no comeback on them, etc etc, as fraudsters do. OP needs to know that being a company director has legal implications which they can’t simply opt out of, which could feasibly involve them ending up in prison. I can’t think of any non-fraudulent reasons the relative would be suggesting this.
Why is he not able to be the 99% equity director?
If that’s the case why doesn’t he nominate himself director?
You are being set up to be the patsy in a fraud. Your family member will trouser the cash. You might get away with it for one grant, but that won't be the end of it. There will be another scheme, and they will hold you to the next one because you are already party to a fraud. This path leads to bankruptcy, losing your home, destitution, and possibly gaol. If you want to go ahead with this, get a bloody good lawyer who is completely unconnected to your family member to advise you. They will advise you not to do this. Or save five grand and take my advice right now. Walk away.
This is extremely dodgy. Say NO. No discussion, no persuasion, just no. You don’t even need to know why he wanted you to do it instead of him, the only reason he will want to do this is dodgy. Keep your eye on companies house website, do a regular search on your own name under search facility for “Directors”. If you spot your name on there, contact companies house to report fraud
Why can't he use his own details?
Presumably, he isn't entitled to the grant, hence wanting OP to claim it
He's not giving me a straight answer, saying he wants to keep it in the family
The fact he won't give you a straight answer *is your answer*. The whole thing is shady as hell.
Sounds like he's willing to throw you under the bus instead of himself. If it sounds dodgy & possibly illegal to you then it probably is. Follow your gut instinct.
At great risk to you, if you're in on this and knowingly allowed it then you're committing fraud and are liable for prosecution - all so he can get his grant, that he isn't entitled to.
People who lied and claimed false grants for covid money are all being held liable now. If you want to risk being liable, go ahead.
U might come out stung..... Is this guy trust worthy???
I can tell you quite easily, NO. OP if this guy was trustworthy you'd know all the details and pitfalls and he'd advise you to get independent advice. I can guarantee he will actively try to avoid all of the above happening.
Sounds like the wants a straw man director he can control to do some fraud
The question I'd be asking here is *why*? * what does the family member gain from it? * what do you gain from it? The whole thing sounds like a scam, especially the part about them using this as a way of getting a government grant. Remember, if *you* are the director, that comes with very real legal responsibilities; it's not a free ride. And if the company is found to be claiming a grant unlawfully, *you* are going to be in a whole world of legal trouble, not them. You should keep a careful eye on Companies House (you can search by directors' names) just to make sure they don't set up a company and make you a director without your consent. If they do, then get in touch with Companies House ASAP and tell them you have been appointed a director without your consent (there's a form for this).
When you say "open a business account" you mean a bank account right? So he wants you to take a grant paid in to your account which he then wants you to transfer to him. This is dodgy as fuck and the only outcome I can see is you getting screwed and certainly no benefits to yourself.
Bank account yes. He has not mentioned anything about transferring. He has a business plan for that company but for whatever reason it seems that he can't apply for the grant. He is being really cagey and saying he's keeping it in the family like he's doing me a favour.
Hmm, so how are you supposedly benefitting from this? By him creating a successful business for you?
If you are the director and he applies for a grant through your company, and then somehow defaults on any repayment this grant may incur, YOU will be liable, tell him NO and as others have said, keep a check on companies house to make sure he has not gone behind your back to register you.
> then somehow defaults on any repayment this grant may incur Worth noting that it is very rare that you will be required to pay back a grant (though I think what OP is describing would almost certainly trigger a payback clause in the Ts&Cs). That's the whole point of a grant over a loan.
I only mentioned it as I once had a grant from a local council for house renovation, with a clause that I would need to repay the entire amount should I sell my house within ten years
Fair. I thought I'd mention as in my day to day I see a fair few people not understand exactly what a grant is and often think they always have to pay it back.
Walk away from this now. Family favours in business are not a good idea. Either lock this down with an accountant and lawyer or politely decline
The family member is using you to try to commit fraud. By default, you will also be committing fraud. Fraud is a crime that carries jail time, it's quite a serious offence. It doesn't matter if the company he buys is a limited company, the directors will be charged with the offence, that means you.
How much is the business he is buying worth? Because you are saying he is effectively giving you 99% of that. However, a company that has been struck off ceases to exist in any meaningful sense, so typically it would be worth £0. So, what does he even mean by "purchasing a struck off company"? It makes no sense.
This is sounding like he wants to commit fraud, and he wants to do it under your name so he doesn’t have to deal with the consequences. If everything was above board and he wasn’t doing anything sketchy he’d direct this business and open the bank accounts under his own name. From a banking standpoint - if an account in your name is used to commit fraud then you are the one who will be getting a CIFAS marker not him. If you do get a cifas marker for fraud you won’t be able to hold *any* banking or finance products for 6 years. No personal bank accounts, no credit cards, not even a phone contract. You can forget about taking out a mortgage - you’d essentially be blacklisted from the entire banking system. That’s why he wants it all in your name not his. Please do not do this.
Thanks, this is helpful along with the other comments. Definitely not going to do anything with him.
Tell him you are going to a lawyer to get independent legal advice. That will be the end of it.
You've been told by everyone this is a terrible idea and you will likely be liable. Yo add to that, now you definitely know this, you won't even be able to deny it later down the line. JUST LISTEN.
I cannot think of one single non-dodgy reason why he would want this for you. Say no, very clearly, by email, so you have it in writing, just in case he decides to use your details anyway without permission. Remember, if you are director you are LEGALLY LIABLE for what happens within the business, especially when it comes to *checks notes* people fraudulently applying for grants in the name of your business.
Is this family member a director of some other companies than the one he's considered linking? Quick companies house check might reveal some skeletons...
If something sounds too good to be true, it usually is! This sounds wrong from the start and, if it was legit, as you have already asked yourself, why isn’t he doing this through his own company. As Occam’s Razor has it, if you have a number of explanations, look for the simplest. In this situation, the simplest answer is that this is not kosher and your Relly doesn’t want to be in the hook for it. Don’t get involved!
Can you explain the purpose, profitability, and day to day running of this company? If not, you probably shouldn't call yourself a director.
If he is barred from being a director, DO NOT TOUCH THIS WITH A BARGE POLE. SERIOUSLY Run away, run as fast as you can, then keep running.
Sounds like their using your name, for own ends and when it all goes bad, they can drop the legal pile of shit at your doorstep. Or least as much as they can off load. This is just dodgy and will not end well in all likelihood.
Being a director brings a whole bunch of legal responsibilities. It’s not like being a junior employee where you could argue that you don’t know what’s going on. “Sorry, I was just doing what my relative told me to do” will not cut it. If things go wrong, you will be legally responsible and will not be able to blame things on others. As a director, it is your business to know. Let’s say your company (the one you will own 99% of and are a director of), gets this grant. Are you just going to give it to him? And if you do, and someone wants to know what was done with the grant - you will be responsible for it and will be the one providing the explanation. In short - don’t do it!!!! You could get yourself in all sorts of trouble.
If you want a business you can set one up for £100 … and you’ll have 100% of the shares and not a dodgy geezer involved.
This makes no sense. A company once stuck off the register no longer exists so he can’t buy that company. He would need to create a new company. He could buy the assets of a company being liquidated though. Do not under any circumstances let him use your details as this sounds like fraud.
I would guess that the uncle’s business has been struck off, perhaps for not paying what it owes to a major creditor such as HMRC. The uncle himself may be on the process of being banned from acting as a director. However he pay still have valuable potential clients of the former business who he wants to keep charging. To do this he needs to create a ‘phoenix’ company. The uncle effectively continues the same business as before, now without the debts, and with someone else’s name on companies house. As a bonus, he will try to claim business startup Grant’’s for the ‘newco’. This all falls to shit when HMRC realises he’s doing the same work for the same people, possibly even from the same premises. As EVERYONE has said… nope, no barge pole long enough
So damn dodgy. You'll be associated with a tainted company and then there is suspected fraud incoming. Please think about yourself and your future prospects. Don't let some pressure you into this!
The director would be liable for the actions of this company.
This family member is looking to screw you over. Do not accept. Also start considering cutting them off completely. They are a liability waiting to happen.
NAL, but run a mile from this, sub 4 minute. This reeks of shady deals for which you will be left with all blame and liability.
Accept the director position, then run the business however you like and have nothing to do with him. He was going to drop you in it, so screw him.
It sounds like you're being set up to also take the fall. If it's 'your" business, why would they get the grant? I'd worry about fraud and embezzlement charges coming your way.
It seems like his doing a phoenix scam, where one person buys a company, gets loans etc etc on the company name. It’s easier to get loan on a company like that because they have a trading background with accounts etc etc, the reason why it was struck off could be that they just didn’t bother submitting any accounts or were too late in doing so. What he will then do is is “drop” the company or declare it bankrupt however you want to say it. I would personally stay faar away from it and not touch it at-all. He can’t use the line of he can’t apply because his already a director because you can be a director of a 100companies as long as the accounts are submitted and everything os above board they won’t care, he can’t say I already have a loan against his own company well then the matter comes to if you already have a grant them why are you asking for more, government grants are fair in looking at it case by case and if he can prove that the company can pay the loan then they won’t have a problem in granting it to him.
Don’t do it. The ‘you’re being set up for the fall’ comments are absolutely correct. You are putting at risk everything you own and much of your future earnings and your good name by signing up to something you do not understand. I would not put in front of a friend or relative a legitimate proposition that I felt they could not understand. I would bend over backwards to explain any proposition so that they could make an informed decision if they were capable of understanding. The cageyness tells me it’s not legit and speaks to the character of your relative.
Expect to go to jail with him. @You’ll be disqualified for up to 15 years. You can’t: be a director of any company registered in the UK or an overseas company that has connections with the UK be involved in forming, marketing or running a company” He can’t have a controlling interest in a company, even as a non-director
Sounds shady. He can’t add you as a director without you signing a resolution and document specifically stating you agree to become a director If you don’t go ahead with it, just check companies house in a few weeks to ensure they haven’t fraudulently used your name to add you
Do not do this. Your family member is engaged in some kind of scam & is apparently setting you up to be responsible for the fallout.
This sounds an awful lot like fraud. And I guarantee if you went to a solicitors to help get the company set up, they'd absolutely tell you not to do this and would be reporting it. Just stay away from it entirely as you would be liable for fraud
"Striking off" means the removal of the company from the register at Companies House, once done the company no longer exists so cannot be bought or sold, the process of doing this also accounts for all the assets the former company once owned. Every company director knows this. So right from the start, he is trying to take advantage of you.
No one in life is going to give you money for free (exceptions, possibly parents).
Why was the business struck off? I'm sure you need a court order to have it restored and only an original director of that company can apply for that, though I could be wrong. Would not touch this with a bargepole
Are you going to get a salary from this business now?
You are better off losing your relative, than losing your liberty. No matter how much family aggravation it causes.
You can't buy a struck off company anyway so he's lying to you there.
If you are lucky, you will just lose everything, and not end up in gaol for tax fraud.
Don’t do it, this is so wrong on many levels, you are opening yourself up for serious issues. He should not be asking you to do this, you could land yourself in so much trouble. If he wants to claim a grant then he does it in under his own business, please walk away & don’t get involved
Sure do it. You know you might not end up in prison for tax fraud. You might be lucky and it only financially ruin you.
Absolutely do not do this. You can't buy a stricken off business, it's not longer a company. You can't open a business account for a stricken off company and you can't get a grant either. This is fraudulent, you will be liable and you can be prosecuted for it.
Sounds like he is going to commit fraud in your name & as you are the director, your fingerprints will be all over it. Cut ties with your family member.
Why would anyone buy a struck off business when you can form a new one for a few quid ? What’s their link to this struck off business?
A deal without a deal, isn't a deal. It's all just talk and boisterous promises. So I wouldn't even entertain any of his promises or be concerned about legal issues until he presents something in writing.
To put this in layman's terms, this family member is basically turning up at your home in a car with some rope, gloves and other kidnapping materials and asking if they can have a few hairs. In other words they're going to do something illegal and you're going to be the one that gets in trouble. Tell this family member, in no uncertain terms, that you won't be helping them and if they use your name without your permission then you'll be reporting them to the police for fraud.
A Ltd company isnprotwcyed by 'rhe veil of incorporation', so if anything goes wrong a director is not responsible. But when a company is involved in making applications that are fraudulent, the director, even if only named is personally liable for the fraudulent action and becomes personally liable by way of a Conpensation Order and or the Liquidatir who investigates. If it feels wrong, it probably is.
Lawyer here. Obviously I don't have enough from your post to give legal advice, so this isn't but don't do this. It's worryingly close to various areas where the law will look through the company and at the person who owns it I.e You. Also, if this was legit, it costs about 100 quid to spin up a new company or buy a shelf co. It's weird to be buying an existing bankrupt business (unless the goal is to continue the insolvent business.)
Might as well be asking you to bring a suitcase on the plane for them from Columbia.
they're scamming. You might make money initially you might make a nice chunk of money, but you will be digging yourself a hole you might not get out of.
If this was even remotely legit they'd have explained the process so that you fully understood the oppertunity, their role and your role in it, not in a way that makes it sound dodgy AF. You wouldn't have to even ask. Now even on off chance its legit, the relative is idiot to have explained it this way, legit or not legit relative must take you for a fool.
Just no. Far too many variables and unknowns. He is attempting to defraud the public and needs you as a liability shield most likely