How can I get my name removed from a joint business bank account?

[IPUS164]

3 years ago I set up a limited company (Company X) with a friend - we were both 50/50 shareholders and directors. We also set up a bank account for Company X with both our names on the mandate. 6 months later it was mutually agreed that I should resign as director (due to other projects requiring my attention) and completed this formally through Companies House. The other director agreed to sort out the paperwork for getting my name removed from the bank account. Since he was now the sole director of Company X and required dual signatures on any cheques etc, I believed this has been completed, because he continued to run the business (even using my new company as a supplier). I then had nothing more to do with the running of Company X.
Last year I moved business premises and I was made aware that he was experiencing personal problems and would be taking time away from his business. After a few months of being unable to contact him, I was informed by his office landlard that he had done a runner and was handed a bank statement for Company X with both his and my name on it!
Basically it appears he has not taken me off the bank account (though how he paid for things confuses me) and it is now in debt with no overdraft facilities - so debt increasing fast.
Firstly, how can I have my name removed from an in-debt bank account, (I can prove I resigned from the company 2.5years ago as all the relevent paperwork was filed at Companies House back then)
Secondly, If I can't have my name removed am I liable for his debt - inspite of not having anything to do with Company X for the last 2.5 years?
Thirdly, would this situation have any effect on my ability to get credit for my current business, should I need it at any point because any perceived association with Company X through my name?

I'm mortified this has happened, I work hard and always pay my bills and am deeply worried that trusting the worng person like I have, will have future consquences. Any help answering these questions would be greatly appreciated.

 

[akirk]

there is a difference between named signatories and the owners of a bank account.

the normal for a limited company is that the business owns the account, and directors (or others) are named signatories using a bank mandate to set that up.

in that instance the ltd. co. is liable for the bank account, unless there is fraud by a signatory.

if though you just have a joint bank account as you suggest then the joint holders are jointly liable, and in the absence of finding the other person the bank may well pursue the person who is most easily found!

you need to talk to the bank - not quite sure why you post on an internet forum - talk to the bank - they will know...

Alasdair

 

[IPUS164]

Hi thanks for your reponse. I forgot to mention that I had contacted the bank who weren't able to give much insight into the situation (I couldn't really give them enough details as it was so long ago). They were meant to contact me back and haven't as yet. I have also spoken briefly to my accountant who suggested the bank would go after the director who could be traced, irrespective of the limited status of the company....

It's a situation that hasn't erupted yet and I wanted to head it off at the pass, so-to-speak. Which is why I thought I would put the questions on a forum.

 

[akirk]

Seems a bit strange - should take the bank about 30 seconds flat to find the account assuming that you can remember the details & to confirm whether it is owned by the Ltd. co. / the two of you personally.

You should also have paperwork from setup...

did cheques have the company name / your names?

if in your names then you are probably jointly liable - if not, you probably won't be - only the bank can answer...

Alasdair

 

[IANL]

When you opened the account did you sign any Guarantee forms for any overdraft / loan. If so you needed to have a letter releasing you from that obligation when you resigned. Resigning as a director does not have any affect to that guarantee unless it states different.

 

[IPUS164]

I'm pretty sure I didn't sign any guarantees for an overdraft and certain I didn't for any loans. As far as I remember the cheques had the company name on them, so I must have only been a signatory.
I no longer have the account paperwork as it was the other director who took care of the banking/invoicing/payments side of the business.
Will try to contact the bank again on the general number as it is no longer possible to contact the branch direct. I notice there was a post on a similar topic to this from August 2010, so someone else has obviously had a similar experience - thanks to this forum's member for all their advice.....

 

[IPUS164]

I'm pretty sure I didn't sign any guarantees for an overdraft and certain I didn't for any loans. As far as I remember the cheques had the company name on them, so I must have only been a signatory.
I no longer have the account paperwork as it was the other director who took care of the banking/invoicing/payments side of the business.
At least I now have a better understanding of the situation. Will contact the bank again on the general number as it is no longer possible to contact the branches directly. I notice there was a post on a similar topic to this from August 2010, so someone else has obviously had a similar experience - thanks to this forum's members for all their advice.....

 

[The Resolver]

If the cheques are in the ltd company name and you did not sign a guarantee for the account then you are not liable. You just need to write to the Bank to point out you are no longer a director and they will remove you from the mandate. The reason he had been able to sign cheques alone was presumably because the mandate was not joint ie either director could sign and they would honour.

 

[madannie1]

I had a joint bank account, but not a business account,the bank normally asks for both signatures and written letter from the other source this should be sufficient.