A client is a sole director of a Limited Company ABC Limited. He registered as a charity as ABS, an unincorporated association.
He listed the charity number on his emails from the ABC Limited a number of months ago, and I explained that the entities were completely separate etc, sent email explaining that he can not ditribute profit from a charity etc etc.
So, he has called today, to say a customer has asked for the Charity accounts etc etc.. We are not appointed for the Charity, and indeed it hasn't done anything yet, not even opened a bank account, however, the client filed the Annual Return for the charity containing the income details from the Limited Company.
On all communications with his customers, he has stated that the business is a charity etc etc and invoices have the charity number.
What are the potential implications legally for this client?
Lorraine
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Go to jail without passing go!
He has mistakenly commited a fraud by representing his company to be a charity when it is not.
He needs to stop associating charitable status with the company straight away by correcting his invoices, letterhead, email footers etc.
He needs to contact the Charity Commission and ask if he can correct the charity's annual return.
He needs to contact any customers who may have done business with his company because it was a charity, confess to his error, and offer to reverse the transaction or recompence them for any loss thay have suffered due to his action.
You need to make a money laundering report.
really?
That is what I thought and mentioned this to the client ( not the ML part..) and advised him to speak to a lawyer who has told him that he has done nothing wrong...!