What could possibly go wrong?!

[jmeredith123]

I am currently the director of 2 uk ltd companies.

I have met an interesting individual who has proposed that I set up another company with him, this would be in the same field of business in which I currently operate (ecommerce) but he brings a unique set of skills that I don't possess.

I'm very interested in this opportunity but don't know the person that well, what are the potential pitfalls if he turns out not to be as presented? Finances are structured in a way that is not an issue, my question is what would the legal repercussions be in the worst case scenario if he turned out to be a rogue director. ie. could I end up in prison for something I didn't do?!

Always good to work on the worst case scenario first!

 

[ethical PR]

As you have your own company you will understand your responsibilities and liabilities as a director and of what would happen if you had acted as personal guarantor for overdrafts , suppliers etc and the business could not pay etc.

Presumably you have a business and marketing plan for your new business and have looked at risks as part of this. And you have consulted a solicitor about a shareholder's agreement.

By the way I don't know anyone with unique business skills.

Have you run a background check regarding his previous company's and finances?

What are you bringing to the table that he needs?

 

[JEREMY HAWKE]

What could possibly go wrong?!

The thing that will go wrong will probably be the thing that nobody predicted when you asked everybody
What could possibly go wrong?!

 

[Paul Norman]

As in all business arrangements, you need to do your due diligence on both the opportunity, and on this person.

Getting into a shared business arrangement with some one you hardly know carries the obvious risks. They could do absolutely anything! But check them out.

And then, get a lawyer to drop up a robust shareholders agreement. Get contracts of engagement, too. Do everything in writing, and in the agreements cover the 'what if it goes pear shaped' stuff thoroughly.

 

[Mark T Jones]

What could go wrong? - Anything

What could go well - pretty much everything

As has already said, robust agreement will do a lot to smooth things out.

I have been shot down for saying this in the past, but remain of the view that time spent thrashing out agreement before involving the legal boys is time well spent. This is where you get to understand each other's perceptions, goals, interpretations of roles etc - even if it doesn't end up in the agreement.

Remember, by the time an agreement gets to court, it has failed in its primary aim

 

[jmeredith123]

Thanks all, good advice. I have decided against it as something wasn't sitting right.

 

[HFE Signs]

Why a new company? Wouldn't it be better to bring him into one you currently own?

 

[Airgunner]

he brings a unique set of skills that I don't possess.

Sounds like something Nick Leeson would say in the film Taken!

 

[SamStones]

Sounds like something Nick Leeson would say in the film Taken!

Or LIAM Neeson (even more likely)

Nick lesson is the trader who took down Barings bank with fraudulent trading ... And u don't want to get into business with someone like that!

 

[Airgunner]

Or LIAM Neeson (even more likely)

Nick lesson is the trader who took down Barings bank with fraudulent trading ... And u don't want to get into business with someone like that!

Your quite right, that must be a subconscious link in the back of my mind as I would be thinking fraud in the OP's position.