Surely this is a fraudulent transaction?
The purchase will be a personal transaction rather than the company buying the shop. Director 'B' who is an equal shareholder is not in a position to partake in the purchase due to an extremely poor credit rating. Now director 'A' has learnt that director 'B's poor credit rating is going to break the deal. So director 'B' has agreed to resign as a director, transfer his share for no consideration so that director 'A' can proceed with the purchase.
Several months later director 'A' will give his share back to 'B' . All based on trust and a nod and a wink! Doesn't this reek of mortgage fraud/money laundering? In which case I have a duty to file a SARS report to SOCA. This is aside from any capital gains tax issues arising. Members views would be much appreciated.
What offence ?
Sharp practice? - maybe.
illegal - definitely not. Not on the facts you give.
As for filing an MLR report - on what basis? There is nothing illegal and no basis on which to suspect anything illegal./
I think . . .
I think what the OP is getting at is that there may be a dishonest misrepresentation that director A is legally and beneficially the owner of 100% of the company whereas in reality A is holding some of the shares as nominee for B who (in truth) is the beneficial owner of them.
If there is a dishonest misrepresentation with the intention of obtaining finance from the lender then that could be a criminal offence under Fraud Act 2006.
However the simple answer is that there is AS YET nothing to trigger a Suspicious Activity Report to SOCA because no benefit has yet been obtained from a criminal act.
More usefully, why not urge your clients to 'come clean' to their solicitor and seek his advice as to how they can legally proceed.
If the solicitor advises them (in knowledge of all the facts) that their plan is legal then there is no obligation to report to SOCA when it goes through (even if the solicitor's advice is actually incorrect - so long as the clients genuinely believe it to be correct and do not suspect otherwise).
The solicitor is not obliged to report anything to SOCA if he is approached for legal advice (as legal professional privilege applies).
David
Why
I can't see anything wrong with it.
The purchaser is dealing in his personal capacity and there is no attempt to defraud anyone.
Even after A has given the shares back, he'll still own the property, and then any sale will be at his risk.
Is there some other aspect to this which you haven't revealed?