Company Secretary & sale of company

Company Secretary & sale of company

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I have recently become Company Secretary of a small electronics company. The assets and the intellectual property are to be transferred to a new company trading from the same premises. The old company has considerable creditors including the Inland Revenue and the bank. The bank bollowings have been personally guaranteed by the Director.

The old company is still trading but on a very reduced basis, & I understand from the Director that the intention is to cease trading in the near future as he has agreed with the new company that he will devote 100% of his time to them.

Sums have been agreed (and paid over) for both the assets and IP. I have no way of knowing whether these valuations are fair, but they will not pay the creditors. I am required, as Company Secretary, to sign the approval of this transfer. The document has been drawn up by the solicitor that is acting for the new company. As far as I know there has been no consultation with the Accountant of the old company.

Can anyone advise me as to the legality of all of this. As Company Secretary what steps should I take to protect myself.

Janice Brown

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janice brown

Replies (2)

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By Chris Smail
02nd Oct 2006 15:08

DO NOT BE INVOLVED
This smells like conspiracy to defraud the Revenue.

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By martinfoley07
01st Oct 2006 11:41

janice, it is absolutely clear
that you should NOT sign anything whatsoever in this regard.
Nor are you required to.

I am more suspicious about fact that the document was drawn up by the lawyer for you to sign than anything else about the whole story!!

The director is SOLELY responsible in law for the conduct and operation of the business and any transfers of assets etc.
(the company concerned cannot be a plc from all you say, including fact there is one director).

As company secretary, you sign NOTHING.
Absolutely nothing.
Most especially if a lawyer has prepared it!!!!

Just tell the director the truth - he/she is responsible, not the company secretary.
The legal transfer document should be changed so that only the director is required to sign.

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