Enterprise Investment Scheme - Is it better to have the inventor of the project as a director or is it OK to be just a shreholder......
My clent has basically given the idea to a Ltd Company (ownership and royalty rights) in exchange for shares. The company is now in the process of attracting investors.
The investment company that has been putting the whole deal together has insisted that he must become a director of the company but my client has insisted that he does not want to. This finance company is insiting that without him as director then the whole investment is in jeopardy.
My client feels that he is being bullied into something he does not want to do. He does have a major shareholding in the company and he is of the opinion that this should be enough for the investors concerned and sees no extra benefit to him being a director.
He has comitted himself to working for 2.5 days per week for the company until the project is ready for market.
Which one of these people is right? Does he need to be a director or can he be what he wants - a consultant with a comitment of 2.5 days per week.