Offered a Directorship

[fazza]

Hope someone can advise on the following.
Myself and two others have just been offered directorships and although we are very flattered we are unsure of what this may entail. The company is very close to bankruptcy although we are confident that we can pull through. To all of a sudden be offered directorships has made us a little suspicious. Can anyone advise on the pro's and cons and clarify exactly what we would be getting ourselves into.
Thanks

 

[profitxchange]

Be very cautious - being directors has legal consequences and it maybe that someone is looking to share the exposure. There are site that will explain the legal responsibilities for a director and it may make your hair curl! Why not become a shareholder (major) and benefit from your input in a turnaround success.

 

[cjd]

Hope someone can advise on the following.
Myself and two others have just been offered directorships and although we are very flattered we are unsure of what this may entail. The company is very close to bankruptcy although we are confident that we can pull through. To all of a sudden be offered directorships has made us a little suspicious. Can anyone advise on the pro's and cons and clarify exactly what we would be getting ourselves into.
Thanks

Have they also suggested ownership? What are they offering in return for being labelled a bankrupt director on the Companies House register and being legally responsible for the consequences?

Why would they offer this now?

 

[ASeelhoff]

There are plenty of risks to consider, among the things you should check are whether you have seen full accounts, what Directors and Officer's Insurance is carried, what assets the company has etc. Even as a director who has no ownership rights you can end up personally liable in some circumstances.

 

[moduslegal]

and finally...

If you are a director at a time a company becomes insolvent, then the relevant insolvency practitioner/official receiver will write a report on your conduct and send it to the Department of Business Innovation and Skills. Depending on what that report says you could be prosecuted under the Company Directors Disqualification Act, disqualified from being a director, fined etc.

Take advice before signing anything

 

[fazza]

Thanks to everyone for their help and advice. Got some thinking and investigating to do.