My dad made me put his business in my name, he has now got me in debt with HMRC

[abilee123]

Hello

Apologies if this isn't in the right category, I've literally just signed up now to post this.

Basically, my dad started a business up in my name. He told me I have to put it in my name, as he can't put it in his (he never explained why), me being dumb, I did this because you have trust in your parents to not screw you over.

I've had nothing to do with this business, other than the fact it's in my name. On companies house, I am listed as a secretary, a director, and a person with significant control, owning 75% or more of shares, and my dad is just listed as a director. I asked my dad to take my name out of the business almost a year ago, he said he would, but this has never been done. I asked him about it the other day, and he claimed my name was taken off the business ages ago. I called him out on his lies as I said I've been on companies house and I'm still showing as active. He has lied to me this whole time, seems extremely suspicious.

He never opens mail for the business. I don't even know where the mail goes. He brought some letters back from somewhere the other day, I opened the ones from HMRC and saw 3 letters from them, dated from September, October, and November 2018 stating they haven't received a VAT return from the business and have estimated it at £1591.00 and it needs to be paid now. May I add that I'm 22, I have absolutely no idea what a VAT return is, I know nothing at all about owning a business or paying VAT, but I'm extremely worried that a business IN MY NAME is receiving these letters.

I confronted my dad about this, he started stressing at me saying it's a mistake and he sorted it ages ago. I don't see how HMRC would make mistakes... it seems pretty important. So anyway, I've told him that I want my name out of the business etc, he just stresses at me says I don't have a clue what I'm doing, he said I'm going to end up owing a lot of money (I don't see how...), I tried contacting the company that he uses for his accounts as they do all the filings and stuff for us (I think), the woman was of no help to me at all and my dad threatened me if I contacted the accountants again and said I was ''showing him up''.

He's now abandoned this business, he now owns another one which he created in August 2018 so he doesn't care about this one. So I'm stuck on what to do, I have absolutely no idea what to do. I have £3 to my name I cannot afford a solicitor, the citizens advice bureau is in the next town over I have no way of getting there, I've tried emailing the accountant and she never emailed me back. I don't even know what my dad is trying to do. He keeps telling me we need to close the business down now, if I close the business down whilst it owes this money to HMRC, will I get into trouble? What is going to happen to my name? I don't want to be disqualified as a business director as I'd like to own my own business in future (obviously when I know what I'm doing unlike right now lol), I just don't want my dad getting me in trouble or tarnishing my name. If I try talking to my dad about any of this he just shouts at me and he is impossible to talk to he just talks over me and walks out. I'd appreciate if anybody could instruct me on what to do, or what is going to happen to me. Thank you

 

[Mark T Jones]

It seems that you effectively own the business, so with immediate effect you should resign as director/secretary (using forms provided on Companies House website)

Others know better than me, but my thought would be to go a for strike off, again using forms on Companies House site

 

[abilee123]

It seems that you effectively own the business, so with immediate effect you should resign as director/secretary (using forms provided on Companies House website)

Others know better than me, but my thought would be to go a for strike off, again using forms on Companies House site

Thank you for the reply. I have tried to do this, but because I am the person with significant control and have shares, do I not need to transfer these shares to my father before I do so, and also appoint a new person with significant control? Because he refuses to sign anything, so if I do have to do this then I am stuck.

 

[Mark T Jones]

Thank you for the reply. I have tried to do this, but because I am the person with significant control and have shares, do I not need to transfer these shares to my father before I do so, and also appoint a new person with significant control? Because he refuses to sign anything, so if I do have to do this then I am stuck.

No. There is no legal relationship between shareholder & director status

 

[abilee123]

No. There is no legal relationship between shareholder & director status

Sorry but just to confirm, so I can resign as director, secretary, and the PSC, and not be liable for any debt my father has got into?

 

[Mark T Jones]

Sorry but just to confirm, so I can resign as director, secretary, and the PSC, and not be liable for any debt my father has got into?

Sorry if I've confused you - you can't 'resign' as PSC - you would need to transfer shares to relinquish that

However, in most circumstances the debt will die with the business.

In any case, you are technically responsible for actions to date (though you might be able to plead exceptional circumstances) - The important thing is to draw a line under everything now

 

[abilee123]

Sorry if I've confused you - you can't 'resign' as PSC - you would need to transfer shares to relinquish that

However, in most circumstances the debt will die with the business.

In any case, you are technically responsible for actions to date (though you might be able to plead exceptional circumstances) - The important thing is to draw a line under everything now

Thank you for your help. I just don't want to get into any trouble, or to have my name ruined by my father. I wasn't sure if it would affect me as a business owner in the future or not. If the debt dies with the business, will this mean I can't own a business? Will anything about this debt ever come back to me?

 

[RCW20025]

I am sorry you have ended up in this position. It woulds seem the most practical option is to apply to strike the company off ASAP. It's hard to give full advice without knowing full details of what has actually gone on but as you are the sole shareholder the profits of the business, if any, are likely to be legally yours.

Does the business have any bank accounts set up it it's name that you can access?

 

[STDFR33]

It seems that you effectively own the business, so with immediate effect you should resign as director/secretary (using forms provided on Companies House website)

Don’t do this!!!

If you aren’t a director you can’t do anything on behalf of the company. Important things. Things such as winding the company up.

 

[abilee123]

I am sorry you have ended up in this position. It woulds seem the most practical option is to apply to strike the company off ASAP. It's hard to give full advice without knowing full details of what has actually gone on but as you are the sole shareholder the profits of the business, if any, are likely to be legally yours.

Does the business have any bank accounts set up it it's name that you can access?

Yeah the business has a bank account with Barclays that is in my name and my dad has access to it too, my dad keeps telling me this needs to be closed down. A cheque went through yesterday for £750, he has withdrawn this and told me today I can now close this account down, it now has no money in it. Over the 2 years it has existed, it has had around £25,000 in it. My dad's an electrician so he's basically been doing electrician work, being paid for jobs etc, but it has all been in my name technically. My dad only became a director in the company in July 2018, but it has existed since February 2017. I have basically just been dumped with all this responsibility, I don't even know how to close the business account down but I'm going to go into the branch on Tuesday and tell them I want to close the account.

I'm worried that my dad has got me in trouble, and I understand my name is on the business but can anything happen to me if I truly didn't have a clue what was going on? I read something about a shadow director, is this not what my dad is? I don't know what striking off a company means, does this mean claiming it is bankrupt? Will this affect me in any way when it comes to opening a business? I don't even know how to strike off a company. As far as I know, the company has absolutely no worth at all so it wouldn't be able to sell any assets to pay off the debt.

 

[abilee123]

Don’t do this!!!

If you aren’t a director you can’t do anything on behalf of the company. Important things. Things such as winding the company up.

I am a director of the company, the business is in my name

 

[abilee123]

I am sorry you have ended up in this position. It woulds seem the most practical option is to apply to strike the company off ASAP. It's hard to give full advice without knowing full details of what has actually gone on but as you are the sole shareholder the profits of the business, if any, are likely to be legally yours.

Does the business have any bank accounts set up it it's name that you can access?

It might also be worth mentioning that my dad registered the business with an accountant company, they seem to also run business. They seem to do all the filing and stuff and all the forms for the business, like when my dad was made a director (even though I never even signed anything to say my dad could become a director, and I never signed anything to register with this company either, so he could've possibly forged my signature as he's done this to my sister in the past with a different business). I tried contacting these people, but I have been ignored by them. I found a letter from them regarding transferring my shares over to my dad, but it was dated August 2018 and my dad never even mentioned it to me. I signed it yesterday, but he wouldn't sign it. Anyway I finally got him to sign it but I think he's signed it in the wrong place. Should I give this into these accountants?

 

[Blaby Loyal]

If you have 75% + of the shares appoint your dad as a director and then immediately resign as a director. Then tell dad to sort it out.

Resign as a director and leave the company with out any directors.

If you don't want to do either then get the company struck off asap

You will be tarred with the same brush as your dad I'm afraid. It will depend if anyone (e.g. a creditor) kicks up a fuss and, if they do, whether your story is credible.

 

[STDFR33]

I am a director of the company, the business is in my name

Yes but the previous poster told you to resign as director. That isn’t the best advice.

 

[STDFR33]

Remain a director and file a DS01.

The company will be no more.

 

[Blaby Loyal]

Remain a director and file a DS01.

The company will be no more.

... and thereby verify by conduct that you accept you are de jure director of the company.

I know what I'd be doing and that's getting as far away from the damned thing as I could.

 

[abilee123]

If you have 75% + of the shares appoint your dad as a director and then immediately resign as a director. Then tell dad to sort it out.

Resign as a director and leave the company with out any directors.

If you don't want to do either then get the company struck off asap

You will be tarred with the same brush as your dad I'm afraid. It will depend if anyone (e.g. a creditor) kicks up a fuss and, if they do, whether your story is credible.

Thanks for the reply. Can I do this even though I am a person with significant control? I read that you cannot leave a company without one. I don't care about leaving my dad liable, I just don't want to be liable for not appointing a PSC when I resigned? My dad is already a director for the company and has been since July 2018. Also, will I still be liable for the debt because I was a director when it happened?

 

[abilee123]

... and thereby verify by conduct that you accept you are de jure director of the company.

I know what I'd be doing and that's getting as far away from the damned thing as I could.

Sorry so just to confirm, if I want nothing to do with this debt, what I have to do is resign as director, secretary, and a PSC, then it will all be left to my dad? I own shares you see, and he has made a mess of the share transfer forms on purpose, also the accountant I need to give this form into is absolutely useless and ignored my last email. I just basically want to leave the company completely, have nothing to do with the debt, and if my dad is liable then so be it.

 

[Blaby Loyal]

If your dad is a director then you resign asap and leave it to him to sort out.

Ignore the PSC - it's a red herring here. You need to get as far away from executive responsibility as you can as soon as you can.

Also, will I still be liable for the debt because I was a director when it happened?

Yes, you will. You may have mitigating circumstances but they might not absolve you from liability.

 

[abilee123]

If your dad is a director then you resign asap and leave it to him to sort out.

Ignore the PSC - it's a red herring here. You need to get as far away from executive responsibility as you can as soon as you can.


Yes, you will. You may have mitigating circumstances but they might not absolve you from liability.

I'm going to get the authentication code from the accountant and fill out the forms online to resign as secretary, director, and PSC. The business is being closed down very soon anyway, but I just wanted my name off it before it is. So this is the best thing for me to do? What is going to happen if any of this comes back to me, and who will I hear from?

 

[abilee123]

Remain a director and file a DS01.

The company will be no more.

Thanks for the reply, I just want to ask why you say I should remain a director and why this is the best thing to do? What is wrong with me resigning?

 

[Blaby Loyal]

If it was all the big con as it seems then why didn't you resign in July last year when your dad became a director?

 

[abilee123]

If it was all the big con as it seems then why didn't you resign in July last year when your dad became a director?

Because all this time I was under the impression that my name was taken off the business, as this is what he told me. Even when I showed him a few days ago that I am showing as an active director, PSC, etc, on companies house he claimed that I was wrong and the accountant had sorted it all out ages ago. Also, I didn't realise that it was a con until a couple days ago I opened a letter from HMRC addressed to the business saying it owes money from over 4 months ago. This letter was only brought to my house a couple of days ago by my dad, from some address I have no access to. My dad claims that this is none of my business and I need to keep my nose out or I will ''make a mess of things''. I truly don't know what to do or who to talk to.

 

[Blaby Loyal]

You need to stop panicking and take stock of your options.

Unless you have transferred your shares then there is nothing you can do to change your position as Person with Significant Control. It is just a legal term and does not mean what you think it means.

You can remain a director (ignore company secretary as well) and take steps to have the company struck off. Whilst this could be taken to demonstrate you knew you were a properly appointed director and had a director's powers, it will be the swiftest way to kill off the company.

You can resign as a director and secretary and leave your dad to sort the mess out.

It would be naive of you though to think you will be able to get away scot-free if someone starts asking questions. From the content of your posts your dad is very likely to lay the blame at your door.

 

[abilee123]

You need to stop panicking and take stock of your options.

Unless you have transferred your shares then there is nothing you can do to change your position as Person with Significant Control. It is just a legal term and does not mean what you think it means.

You can remain a director (ignore company secretary as well) and take steps to have the company struck off. Whilst this could be taken to demonstrate you knew you were a properly appointed director and had a director's powers, it will be the swiftest way to kill off the company.

You can resign as a director and secretary and leave your dad to sort the mess out.

The thing is there is a letter regarding transferring my shares to him, from August 2018 and that it was executed by the company on 16th July 2018. This is now signed by both me and my father after I asked him to sign it yesterday which he reluctantly did, so if I give this to the accountant or who my dad claims ''handles all the stuff'', will this still count as happening on 16th July 2018? Or not because I only handed it in today? (I apologise for any stupid questions, I really am this clueless). That way, if all of this goes through, can I then resign as director and everything is ok?

 

[Blaby Loyal]

What did you sign yesterday? The share transfer took place on 16.07.2018?

 

[abilee123]

What did you sign yesterday? The share transfer took place on 16.07.2018?

Yes, it's a form claiming that I transfer my shares to my dad, and that this was executed by the company on 16th July 2018. It just wasn't signed until yesterday, because my dad didn't show the form to me or tell me about it. So I was going to give it into the accountant company today that it came from back in August.

 

[Blaby Loyal]

Without sight of the share transfer paperwork it's difficult to say for certain but you would have a strong case to support a date of 16.07.2018.

Send it to the accountant and clearly state that the effective date of the transfer is 16.07.2018.

Keep hold of copies of whatever you send to anyone from now on regarding the company.

You are down to two choices now:

(1) - stay as a director and strike the company off (DS01 procedure) ; or
(2) - resign as a director and notify dad and the accountant

(1) is usually the swiftest way to a kill. (2) what will dad do with the company next?

 

[STDFR33]

Thanks for the reply, I just want to ask why you say I should remain a director and why this is the best thing to do? What is wrong with me resigning?

Because you can’t get the company struck off if you do that.

I’d apply to have the company dissolved via a DS01.

 

[Blaby Loyal]

When did the company cease trading?

The reason being that you can't legitimately apply for striking-off until three months have gone by since the company ceased to trade.

This might be too long for you?

 

[abilee123]

When did the company cease trading?

The reason being that you can't legitimately apply for striking-off until three months have gone by since the company ceased to trade.

This might be too long for you?

If it's any help, I've uploaded some pics of the form here:

imgur/a/9K8rYam (please add .com after the word imgur, it won't let me upload links)

As you can see there's something called certificate 1 and certificate 2, certificate 1 shouldn't have been filled out but in my dad's little fit of rage at me asking him to sign the form he just signed it without reading, not sure if this will matter when handing it in or not to the accountant.

As for ceasing trading, he hasn't done any work that I know of for a good 6 months+, but there was a cheque that was cleared yesterday into the business bank account for £750 from a job he did months ago. So, this probably counts as still trading doesn't it? Meaning I'll have to wait 3 months before I can even strike the company off. What do you think is my best and safest option?

 

[Blaby Loyal]

I'd say take the risk of demonstrating you are/were an 'active' director and strike the damned thing off.

You should be OK to strike off now. Banking a cheque isn't really carry on the company's trade.

There isn't really a 'safe' option as that will depend on whether someone like HMRC decides to poke around i.e. you are dependent on the actions or inactions of others.

 

[abilee123]

I'd say take the risk of demonstrating you are/were an 'active' director and strike the damned thing off.

You should be OK to strike off now. Banking a cheque isn't really carry on the company's trade.

There isn't really a 'safe' option as that will depend on whether someone like HMRC decides to poke around i.e. you are dependent on the actions or inactions of others.

So I shouldn't resign as director and leave it all to my dad? Also, my dad was going to strike it off anyway. Is it not best for me to leave it to him to strike it off rather than myself?

 

[STDFR33]

So I shouldn't resign as director and leave it all to my dad? Also, my dad was going to strike it off anyway. Is it not best for me to leave it to him to strike it off rather than myself?

Why would you trust your dad to strike it off?

He’s been nothing but a cockwomble.

You are a director. Take initiative and get it struck off yourself.

 

[abilee123]

Why would you trust your dad to strike it off?

He’s been nothing but a cockwomble.

You are a director. Take initiative and get it struck off yourself.

Because I thought that this way, it will show that he has been the one calling all the shots rather than me if it ever comes back to me. I've never had anything to do with the company. Also, he deals with the accountant not me, I need an authentication code to access the online form which I asked the accountant for via email, she asked for proof of address which I gave to her and then she has ignored me since. My dad is also reluctant to sign anything and probably won't let me do it myself anyway, he does everything behind my back with this accountant. He's probably going to get them to do it for him. Also you're right he is a cockwomble.

 

[Blaby Loyal]

You don't need an Authentication Code to strike off.

You do need £10 though

 

[abilee123]

You don't need an Authentication Code to strike off.

You do need £10 though

Do I not need my dad to sign it also though as he is a director? Is there also a chance that HMRC won't chase this debt up? If that's the case, am I basically in the clear? Apologies for all the questions you've been extremely helpful and I really appreciate it, thank you very much for all your help

 

[AllUpHere]

I've only just scanned this thread, but has anyone asked why the aforementioned Cockwomble (kudos to @STDFR33 for the first use of the term on this forum that I've noticed) actually used you to front his company in the first place. I wouldn't be doing anything until I knew what he had been up to. For all you know he could have been laundering money through the company. If you have never signed anything, and never acted as a director you have a strong case for the fact that it was nothing to do with you. Once you start filing forms and acting as a director, than gets lost quickly.

 

[Blaby Loyal]

Yes, if there are two directors then both need to sign.

If dad won't sign then resign immediately.

As per AllUpHere's post and my earlier posts, if the dung hits the fan then you can't expect to get away scot-free.

What you are doing is effectively damage limitation.

 

[abilee123]

I've only just scanned this thread, but has anyone asked why the aforementioned Cockwomble (kudos to @STDFR33 for the first use of the term on this forum that I've noticed) actually used you to front his company in the first place. I wouldn't be doing anything until I knew what he had been up to. For all you know he could have been laundering money through the company. If you have never signed anything, and never acted as a director you have a strong case for the fact that it was nothing to do with you. Once you start filing forms and acting as a director, than gets lost quickly.

I'm not sure why he can't own one, though I might ask my mum. He had no money at the time and left his job to start up a business, I felt bad for him and thought I was doing him a favour, and to be honest I didn't expect my dad to do this to me, but now I've realised he's just been taking advantage of me and not only that but then claims it's none of my business, when actually it is my business because it's MY business.

As for what you said about acting as a director I also thought this, and this is why I thought it'd be best for me to just close the bank account (as only I can do that, and it keeps having charges taken out of it leaving the bank account £6.50 overdrawn every month, which my dad said he refuses to pay if I don't close the bank account) and leave the business to him, that way if anything comes of it I can say it's nothing to do with me and as far as I knew my name had been taken off the business because he said he did that.