How to escape a shill directorship [closed]

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I have been working for a company for a little over 6 years. Around 18 months ago the director approached me with a proposal. He was launching a sister company to do much the same thing but in some different territories and wanted me to be a director of the sister company.

I won't go into too much detail, but the bottom line is that this is a shill company, and that realisation unfortunately only became clear to me after some time.

Now a year on, the company seems to be going strong, but I've had absolutely no input into it, I have very little information about what it's doing, and I am the only director of the company.

I realise I have left myself in a position where I could be screwed and I am now feeling uncomfortable about it and want out.

To that end, I have started looking for another job. I don't feel like it would be possible to close the company and keep my job, everything would be messy and awkward and it's much easier for everyone if I just make a clean break.

However, the timing will be critical as I can't afford to be without a job for more than a few weeks and I also don't want to give them any opportunity to cause me financial trouble by leaving me with a company with debts on my hands.

My question is this: I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

Note: I'm not interested in getting anyone into any trouble financially or legally, and would prefer everyone to be happy at the end, but if it comes down to a choice I will obviously put myself first.

Note 2: There is no formal contract in place covering this relationship between me and the company and my employer other than a standard terms of employment contract. I was verbally offered a fixed payment and this was simply added to my salary.

united-kingdom quitting

share|improve this question

asked Sep 3 at 15:35

Confused

1271

closed as off-topic by gnat, Lumberjack, mcknz, Myles, IDrinkandIKnowThings Sep 5 at 14:14

This question appears to be off-topic. The users who voted to close gave this specific reason:

• "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – mcknz, Myles, IDrinkandIKnowThings

If this question can be reworded to fit the rules in the help center, please edit the question.

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  What exactly does companieshouse think your position is? If they think you are the director then you may be in trouble.
  – gnasher729
  Sep 3 at 15:46
  

  
  
  
  


• 
  
  
  

  
  8
  

  
  
  
  
  
  

  
  Personally I think this is a "lawyer up now" situation. You are effectively part of a fraudulent scheme, albeit naively.
  – Peter M
  Sep 3 at 15:49
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  Your question is confusing - you seem to assume that the company would shut down without you, but also state that you are not involved. It seems like your role is not critical so leaving would not impair the company. Also, you imply that you might be personally liable but as an employee that would be virtually impossible. How would you end up owning it or being responsible for it in any way? Last, you feel you could be "screwed" but it isn't clear how that could happen... illegal activities usually require you to be aware of the activity at a minimum.
  – Jim
  Sep 3 at 15:55
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  "Companies House is the United Kingdom's registrar of companies", per Wikipedia, so the above comment "I am the director, registered at companies house" sounds like OP is legally registered as being in charge of the company.
  – aem
  Sep 4 at 2:20
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  As it is a limited liability company, creditors could only claim company assets, and never your own, no matter what happens, so you are safe financially. However, that might change if they can prove fraud, so get lawyered up ASAP. You will find that most will give you a free hour of consultation, and their is also the Citizens' Advice Centre.
  – Mawg
  Sep 4 at 8:11
  

  
  
  
  

 | 
show 9 more comments

up vote
4
down vote

favorite

I have been working for a company for a little over 6 years. Around 18 months ago the director approached me with a proposal. He was launching a sister company to do much the same thing but in some different territories and wanted me to be a director of the sister company.

I won't go into too much detail, but the bottom line is that this is a shill company, and that realisation unfortunately only became clear to me after some time.

Now a year on, the company seems to be going strong, but I've had absolutely no input into it, I have very little information about what it's doing, and I am the only director of the company.

I realise I have left myself in a position where I could be screwed and I am now feeling uncomfortable about it and want out.

To that end, I have started looking for another job. I don't feel like it would be possible to close the company and keep my job, everything would be messy and awkward and it's much easier for everyone if I just make a clean break.

However, the timing will be critical as I can't afford to be without a job for more than a few weeks and I also don't want to give them any opportunity to cause me financial trouble by leaving me with a company with debts on my hands.

My question is this: I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

Note: I'm not interested in getting anyone into any trouble financially or legally, and would prefer everyone to be happy at the end, but if it comes down to a choice I will obviously put myself first.

Note 2: There is no formal contract in place covering this relationship between me and the company and my employer other than a standard terms of employment contract. I was verbally offered a fixed payment and this was simply added to my salary.

united-kingdom quitting

share|improve this question

asked Sep 3 at 15:35

Confused

1271

closed as off-topic by gnat, Lumberjack, mcknz, Myles, IDrinkandIKnowThings Sep 5 at 14:14

This question appears to be off-topic. The users who voted to close gave this specific reason:

• "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – mcknz, Myles, IDrinkandIKnowThings

If this question can be reworded to fit the rules in the help center, please edit the question.

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  What exactly does companieshouse think your position is? If they think you are the director then you may be in trouble.
  – gnasher729
  Sep 3 at 15:46
  

  
  
  
  


• 
  
  
  

  
  8
  

  
  
  
  
  
  

  
  Personally I think this is a "lawyer up now" situation. You are effectively part of a fraudulent scheme, albeit naively.
  – Peter M
  Sep 3 at 15:49
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  Your question is confusing - you seem to assume that the company would shut down without you, but also state that you are not involved. It seems like your role is not critical so leaving would not impair the company. Also, you imply that you might be personally liable but as an employee that would be virtually impossible. How would you end up owning it or being responsible for it in any way? Last, you feel you could be "screwed" but it isn't clear how that could happen... illegal activities usually require you to be aware of the activity at a minimum.
  – Jim
  Sep 3 at 15:55
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  "Companies House is the United Kingdom's registrar of companies", per Wikipedia, so the above comment "I am the director, registered at companies house" sounds like OP is legally registered as being in charge of the company.
  – aem
  Sep 4 at 2:20
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  As it is a limited liability company, creditors could only claim company assets, and never your own, no matter what happens, so you are safe financially. However, that might change if they can prove fraud, so get lawyered up ASAP. You will find that most will give you a free hour of consultation, and their is also the Citizens' Advice Centre.
  – Mawg
  Sep 4 at 8:11
  

  
  
  
  

 | 
show 9 more comments

up vote
4
down vote

favorite

up vote
4
down vote

favorite

I have been working for a company for a little over 6 years. Around 18 months ago the director approached me with a proposal. He was launching a sister company to do much the same thing but in some different territories and wanted me to be a director of the sister company.

I won't go into too much detail, but the bottom line is that this is a shill company, and that realisation unfortunately only became clear to me after some time.

Now a year on, the company seems to be going strong, but I've had absolutely no input into it, I have very little information about what it's doing, and I am the only director of the company.

I realise I have left myself in a position where I could be screwed and I am now feeling uncomfortable about it and want out.

To that end, I have started looking for another job. I don't feel like it would be possible to close the company and keep my job, everything would be messy and awkward and it's much easier for everyone if I just make a clean break.

However, the timing will be critical as I can't afford to be without a job for more than a few weeks and I also don't want to give them any opportunity to cause me financial trouble by leaving me with a company with debts on my hands.

My question is this: I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

Note: I'm not interested in getting anyone into any trouble financially or legally, and would prefer everyone to be happy at the end, but if it comes down to a choice I will obviously put myself first.

Note 2: There is no formal contract in place covering this relationship between me and the company and my employer other than a standard terms of employment contract. I was verbally offered a fixed payment and this was simply added to my salary.

united-kingdom quitting

share|improve this question

asked Sep 3 at 15:35

Confused

1271

I have been working for a company for a little over 6 years. Around 18 months ago the director approached me with a proposal. He was launching a sister company to do much the same thing but in some different territories and wanted me to be a director of the sister company.

I won't go into too much detail, but the bottom line is that this is a shill company, and that realisation unfortunately only became clear to me after some time.

Now a year on, the company seems to be going strong, but I've had absolutely no input into it, I have very little information about what it's doing, and I am the only director of the company.

I realise I have left myself in a position where I could be screwed and I am now feeling uncomfortable about it and want out.

To that end, I have started looking for another job. I don't feel like it would be possible to close the company and keep my job, everything would be messy and awkward and it's much easier for everyone if I just make a clean break.

However, the timing will be critical as I can't afford to be without a job for more than a few weeks and I also don't want to give them any opportunity to cause me financial trouble by leaving me with a company with debts on my hands.

My question is this: I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

Note: I'm not interested in getting anyone into any trouble financially or legally, and would prefer everyone to be happy at the end, but if it comes down to a choice I will obviously put myself first.

Note 2: There is no formal contract in place covering this relationship between me and the company and my employer other than a standard terms of employment contract. I was verbally offered a fixed payment and this was simply added to my salary.

united-kingdom quitting

share|improve this question

asked Sep 3 at 15:35

Confused

1271

share|improve this question

share|improve this question

asked Sep 3 at 15:35

Confused

1271

asked Sep 3 at 15:35

Confused

1271

asked Sep 3 at 15:35

Confused

1271

1271

closed as off-topic by gnat, Lumberjack, mcknz, Myles, IDrinkandIKnowThings Sep 5 at 14:14

This question appears to be off-topic. The users who voted to close gave this specific reason:

• "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – mcknz, Myles, IDrinkandIKnowThings

If this question can be reworded to fit the rules in the help center, please edit the question.

closed as off-topic by gnat, Lumberjack, mcknz, Myles, IDrinkandIKnowThings Sep 5 at 14:14

This question appears to be off-topic. The users who voted to close gave this specific reason:

• "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – mcknz, Myles, IDrinkandIKnowThings

If this question can be reworded to fit the rules in the help center, please edit the question.

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  What exactly does companieshouse think your position is? If they think you are the director then you may be in trouble.
  – gnasher729
  Sep 3 at 15:46
  

  
  
  
  


• 
  
  
  

  
  8
  

  
  
  
  
  
  

  
  Personally I think this is a "lawyer up now" situation. You are effectively part of a fraudulent scheme, albeit naively.
  – Peter M
  Sep 3 at 15:49
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  Your question is confusing - you seem to assume that the company would shut down without you, but also state that you are not involved. It seems like your role is not critical so leaving would not impair the company. Also, you imply that you might be personally liable but as an employee that would be virtually impossible. How would you end up owning it or being responsible for it in any way? Last, you feel you could be "screwed" but it isn't clear how that could happen... illegal activities usually require you to be aware of the activity at a minimum.
  – Jim
  Sep 3 at 15:55
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  "Companies House is the United Kingdom's registrar of companies", per Wikipedia, so the above comment "I am the director, registered at companies house" sounds like OP is legally registered as being in charge of the company.
  – aem
  Sep 4 at 2:20
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  As it is a limited liability company, creditors could only claim company assets, and never your own, no matter what happens, so you are safe financially. However, that might change if they can prove fraud, so get lawyered up ASAP. You will find that most will give you a free hour of consultation, and their is also the Citizens' Advice Centre.
  – Mawg
  Sep 4 at 8:11
  

  
  
  
  

 | 
show 9 more comments

• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  What exactly does companieshouse think your position is? If they think you are the director then you may be in trouble.
  – gnasher729
  Sep 3 at 15:46
  

  
  
  
  


• 
  
  
  

  
  8
  

  
  
  
  
  
  

  
  Personally I think this is a "lawyer up now" situation. You are effectively part of a fraudulent scheme, albeit naively.
  – Peter M
  Sep 3 at 15:49
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  Your question is confusing - you seem to assume that the company would shut down without you, but also state that you are not involved. It seems like your role is not critical so leaving would not impair the company. Also, you imply that you might be personally liable but as an employee that would be virtually impossible. How would you end up owning it or being responsible for it in any way? Last, you feel you could be "screwed" but it isn't clear how that could happen... illegal activities usually require you to be aware of the activity at a minimum.
  – Jim
  Sep 3 at 15:55
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  "Companies House is the United Kingdom's registrar of companies", per Wikipedia, so the above comment "I am the director, registered at companies house" sounds like OP is legally registered as being in charge of the company.
  – aem
  Sep 4 at 2:20
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  As it is a limited liability company, creditors could only claim company assets, and never your own, no matter what happens, so you are safe financially. However, that might change if they can prove fraud, so get lawyered up ASAP. You will find that most will give you a free hour of consultation, and their is also the Citizens' Advice Centre.
  – Mawg
  Sep 4 at 8:11
  

  
  
  
  

1

1

What exactly does companieshouse think your position is? If they think you are the director then you may be in trouble.
– gnasher729
Sep 3 at 15:46

What exactly does companieshouse think your position is? If they think you are the director then you may be in trouble.
– gnasher729
Sep 3 at 15:46

8

8

Personally I think this is a "lawyer up now" situation. You are effectively part of a fraudulent scheme, albeit naively.
– Peter M
Sep 3 at 15:49

Personally I think this is a "lawyer up now" situation. You are effectively part of a fraudulent scheme, albeit naively.
– Peter M
Sep 3 at 15:49

1

1

Your question is confusing - you seem to assume that the company would shut down without you, but also state that you are not involved. It seems like your role is not critical so leaving would not impair the company. Also, you imply that you might be personally liable but as an employee that would be virtually impossible. How would you end up owning it or being responsible for it in any way? Last, you feel you could be "screwed" but it isn't clear how that could happen... illegal activities usually require you to be aware of the activity at a minimum.
– Jim
Sep 3 at 15:55

Your question is confusing - you seem to assume that the company would shut down without you, but also state that you are not involved. It seems like your role is not critical so leaving would not impair the company. Also, you imply that you might be personally liable but as an employee that would be virtually impossible. How would you end up owning it or being responsible for it in any way? Last, you feel you could be "screwed" but it isn't clear how that could happen... illegal activities usually require you to be aware of the activity at a minimum.
– Jim
Sep 3 at 15:55

1

1

"Companies House is the United Kingdom's registrar of companies", per Wikipedia, so the above comment "I am the director, registered at companies house" sounds like OP is legally registered as being in charge of the company.
– aem
Sep 4 at 2:20

"Companies House is the United Kingdom's registrar of companies", per Wikipedia, so the above comment "I am the director, registered at companies house" sounds like OP is legally registered as being in charge of the company.
– aem
Sep 4 at 2:20

1

1

As it is a limited liability company, creditors could only claim company assets, and never your own, no matter what happens, so you are safe financially. However, that might change if they can prove fraud, so get lawyered up ASAP. You will find that most will give you a free hour of consultation, and their is also the Citizens' Advice Centre.
– Mawg
Sep 4 at 8:11

As it is a limited liability company, creditors could only claim company assets, and never your own, no matter what happens, so you are safe financially. However, that might change if they can prove fraud, so get lawyered up ASAP. You will find that most will give you a free hour of consultation, and their is also the Citizens' Advice Centre.
– Mawg
Sep 4 at 8:11

 | 
show 9 more comments

1 Answer
1

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up vote
6
down vote

I have very little information about what it's doing, and I am the only director of the company.

As I hope you realise now, this was a serious mistake to make. As a director of a company, you are expected to "exercise reasonable care, skill and diligence" (from the Companies Act 2006). It seems likely that you have not done that, which could (talk to an actual lawyer) make you personally liable for the actions of the company.

I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

You resign as a director. The forms are available from Companies House. Note that this doesn't result in the company closing, simply that the shareholders (whoever they may be) are required to appoint another director.

There is no formal contract in place covering this relationship between me and the company

While there's not a contract, there's something from your point of view much more serious than that: your directorship. There were a whole bunch of forms you signed when you became a director in which you asserted that you understood the responsibilities that you were taking on; that's going to make the courts look unfavourably on any claims of "I didn't understand what was going on".

I seriously advise you to go and talk to a actual lawyer as they will be able to advise you how best to get out of the very large hole you've dug for yourself here.

share|improve this answer

answered Sep 3 at 17:53

Philip Kendall

42k28109140

add a comment | 

1 Answer
1

active

oldest

votes

1 Answer
1

active

oldest

votes

active

oldest

votes

active

oldest

votes

up vote
6
down vote

I have very little information about what it's doing, and I am the only director of the company.

As I hope you realise now, this was a serious mistake to make. As a director of a company, you are expected to "exercise reasonable care, skill and diligence" (from the Companies Act 2006). It seems likely that you have not done that, which could (talk to an actual lawyer) make you personally liable for the actions of the company.

I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

You resign as a director. The forms are available from Companies House. Note that this doesn't result in the company closing, simply that the shareholders (whoever they may be) are required to appoint another director.

There is no formal contract in place covering this relationship between me and the company

While there's not a contract, there's something from your point of view much more serious than that: your directorship. There were a whole bunch of forms you signed when you became a director in which you asserted that you understood the responsibilities that you were taking on; that's going to make the courts look unfavourably on any claims of "I didn't understand what was going on".

I seriously advise you to go and talk to a actual lawyer as they will be able to advise you how best to get out of the very large hole you've dug for yourself here.

share|improve this answer

answered Sep 3 at 17:53

Philip Kendall

42k28109140

add a comment | 

up vote
6
down vote

I have very little information about what it's doing, and I am the only director of the company.

As I hope you realise now, this was a serious mistake to make. As a director of a company, you are expected to "exercise reasonable care, skill and diligence" (from the Companies Act 2006). It seems likely that you have not done that, which could (talk to an actual lawyer) make you personally liable for the actions of the company.

I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

You resign as a director. The forms are available from Companies House. Note that this doesn't result in the company closing, simply that the shareholders (whoever they may be) are required to appoint another director.

There is no formal contract in place covering this relationship between me and the company

While there's not a contract, there's something from your point of view much more serious than that: your directorship. There were a whole bunch of forms you signed when you became a director in which you asserted that you understood the responsibilities that you were taking on; that's going to make the courts look unfavourably on any claims of "I didn't understand what was going on".

I seriously advise you to go and talk to a actual lawyer as they will be able to advise you how best to get out of the very large hole you've dug for yourself here.

share|improve this answer

answered Sep 3 at 17:53

Philip Kendall

42k28109140

add a comment | 

up vote
6
down vote

up vote
6
down vote

I have very little information about what it's doing, and I am the only director of the company.

As I hope you realise now, this was a serious mistake to make. As a director of a company, you are expected to "exercise reasonable care, skill and diligence" (from the Companies Act 2006). It seems likely that you have not done that, which could (talk to an actual lawyer) make you personally liable for the actions of the company.

I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

You resign as a director. The forms are available from Companies House. Note that this doesn't result in the company closing, simply that the shareholders (whoever they may be) are required to appoint another director.

There is no formal contract in place covering this relationship between me and the company

While there's not a contract, there's something from your point of view much more serious than that: your directorship. There were a whole bunch of forms you signed when you became a director in which you asserted that you understood the responsibilities that you were taking on; that's going to make the courts look unfavourably on any claims of "I didn't understand what was going on".

I seriously advise you to go and talk to a actual lawyer as they will be able to advise you how best to get out of the very large hole you've dug for yourself here.

share|improve this answer

answered Sep 3 at 17:53

Philip Kendall

42k28109140

I have very little information about what it's doing, and I am the only director of the company.

As I hope you realise now, this was a serious mistake to make. As a director of a company, you are expected to "exercise reasonable care, skill and diligence" (from the Companies Act 2006). It seems likely that you have not done that, which could (talk to an actual lawyer) make you personally liable for the actions of the company.

I know I've made a mistake in letting myself get suckered into this, how do I make a clean break without any undue risk to myself financially or legally?

You resign as a director. The forms are available from Companies House. Note that this doesn't result in the company closing, simply that the shareholders (whoever they may be) are required to appoint another director.

There is no formal contract in place covering this relationship between me and the company

While there's not a contract, there's something from your point of view much more serious than that: your directorship. There were a whole bunch of forms you signed when you became a director in which you asserted that you understood the responsibilities that you were taking on; that's going to make the courts look unfavourably on any claims of "I didn't understand what was going on".

I seriously advise you to go and talk to a actual lawyer as they will be able to advise you how best to get out of the very large hole you've dug for yourself here.

share|improve this answer

answered Sep 3 at 17:53

Philip Kendall

42k28109140

share|improve this answer

share|improve this answer

answered Sep 3 at 17:53

Philip Kendall

42k28109140

answered Sep 3 at 17:53

Philip Kendall

42k28109140

answered Sep 3 at 17:53

Philip Kendall

42k28109140

42k28109140

add a comment | 

add a comment |