Why were you needed to offer a good credit rating if you weren’t ever going to be liable?
What benefit does the bank get?
And I echo Cosmic Relief’s ppint about your son’s shady ethics.
Did you read everything you signed?
You need to speak to a lawyer ASAP. As a Director of a private company, you very well may be personally liable for any debts or liabilites.
You haven’t mentioned what the ownership structure is or what type of company it is. That information is important.
Well, if you say so. But this:
…makes no sense to me. Credit rating was important, but the loan was by the previous owner for whom credit rating wasn’t important? How does that make sense?
For credit rating to be important, there must be a creditor somewhere who cared about that credit rating. It may not be the loan used to buy the business. If I had to guess, I’d say maybe it was important for trade creditors. But there is a creditor somewhere, or credit rating wasn’t important. Who signed on that credit, directly or as guarantor?
You say you were appointed MD. If there are directors there must be a company. IME a company’s credit rating depends on its assets not who its MD is. So why were you appointed MD? It makes no sense.
This is all probably irrelevent to the current issue, but as I say I am not at all confident you have a real understanding of the position, which you need before you can get a grip on the current issue.
If, at the time of incorporation, the son was an undischarged bankrupt, then someone other than the son would have to be a director. If the son were the secretary of the corporation, then someone other than the son would have to be a director. If there were some juristic prohibition against the son from being a director, then someone other than the son would have to be a director. Aside from this sort of thing, there is no reason in law why an English corporation would require Chowder to be a director rather than or in addition to his son being a director.
If an investor or creditor wanted to protects its interests, it would want two things done. First, it would want to secure the debt. One common way of doing this is to get personal guarantees from various parties. Chowder and his lawyer should investigate this with great care and attention, for the creditor having insisted on Chowder being involved due to the son’s poor credit is a flaming red flag shooting through the air suggesting that Chowder may have signed a personal guarantee at some point. Second, it would want to satisfy itself that the management team, and particularly the managing director, of the corporation is up to the job. Chowder, his corporate lawyer, and his accountant should investigate this too, for at the very least, Chowder has taken on the duties of a managing director without performing the job with the required reasonable care, skill and diligence.
In any event, a director of a corporaton is responsible to the company, and a managing director in particular is responsible for the running of the company, so Chowder, his corporate lawyer and his accountant need to take great care to ensure that the company has been run properly and will continue to be run properly until such a time as Chowder is no longer associated with it. Note that running a company prpoperly includes ensuring that funds are not inappropriately taken by the son, that employees and shareholders (either of which might include the daughter-in-law) are treated justly, that health and safety requirements are met, and that taxes are filed. Since the managing director of a company will be held responsible for running the company with reasonable care, skill and diligence, Chowder, his corporate lawyer and his account should take great care to determine if the company has been properly run in the past, and take steps to ensure that it continues to be run properly in the future (until such a time as he may chose to resign), with Chowder actually taking up the task of managing director rather than simply holding the name while ignoring the responsibilities.
Muffin remains wise. I admit, I did not even think about the potential for the son misusing the finances of the corporation, which seems possible, given how he has set up a second apartment. (It is often incredibly ‘easy’ to go ‘I’ll… just borrow some of this office cash for a bit for personal use, I’ll pay it back someday, it’s all mine anyhow.’
Contact a solicitor. Do find out what your actual responsibilities are. But quitting now won’t help a bit for already existing issues, sadly.
You are probably right, maybe I just went into it eyes wide shut because it was my son.
I’m going to have to enquire of him exactly what the position is
Your lad sounds right dodgy, matey. Don’t be overly shocked if his answers ain’t 100% kosher.
First thing Monday, get yersen off to a solicitor.
This was a terrible idea. After reading the whole thread - what Muffin said, particularly his last paragraph.
You need to get yourself a lawyer, first thing on Monday morning,chowder. You need to get yourself disentangled from the responsibilities that are attached to you as Managing Director. And you’re going to need to have words with your boy, like, serious words.
You already may be in trouble because you listened to your son. Don’t rely on answers from him. Bring him along when you vistit the attorney and let the attorney ask him some pointed questions.
- Lawyer for you.
- Lawyer for your daughter-in-law.
- There doesn’t sound like there is any profit for anyone here except for your son (possibly) and all the lawyers that will be required to untangle this unholy mess. Thanks for once again reminding me why you shouldn’t mix business with family or friends.
NOW do you see why some folks like to collect gnomes? It’s less risky. 
Good luck to you.
Yeah, I really wouldn’t listen to your son’s opinion of what you’re possibly in hock for. He… isn’t unbiased, and considering what he offered his wife, may be slightly delusional at this point.
I’m not calling him out to screw you, I’m saying ‘mid life crisis’ + ‘new boobies’ have wrecked many a man.
You are so right, he’s madly in love with his new swain who incidentally was and still is a member of his work force.
She’s also got rather large boobies, far bigger than his wife’s
Chowder
I’m just going to agree with everyone here who has said get thee to a lawyer.
I’m a Director / company secatary of a small firm not far from you just over the pennines in gods own county.
The way we came to own our buisness sounds very much similar to your sons. After working for the previous owners for 20 years they decided that retirement beckoned and offered us the chance to buy the firm, there was a tremendous amount of paperwork involved, lawyers acccountants solicitors the tax man the banks etc. all of these people required guarentees of some nature.
I personally and I maybe wrong, cannot see you being registered as MD without some financial responsibility somewhere along the line.
So please take a little legal advice from a proffesional sooner rather than later.
Oh, god. She’s from at work? Yeah, he’s almost certainly abusing company resources, then.
You see, his wife doesn’t understand him like the boobies do. She’s not there for him all the time. (and so on and so on.) At the very least, he’s probably taking the boobies along with him on various sales trips, and yes, that can probably fuck him over as misuse of company funds.
Oh. Oh oh oh. Your son is not looking good here, I guess you realize that.
But we’d be happy to look at any boob-related pics of the new girlfriend.
No advice to offer, just condolences, Chowder. Knowing what a good guy you are, I will hope the best for you. Not sure what to hope for your son, frankly.
Never mind
Hope the son gets his head on straight before the boobies ruin his life.