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Client funds bank account

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Dear members, I got across a problem which I would really appreciate a  clearance. I have a new job for a company whos bookkeeping, payroll and accounts done by the third party -some sort of bookkeeping/secreatarial services company. So they open our bisiness bank account back 2016 on their name and registred themselfe as ac director. Now I am taking everything in house but as a bank manager stated we need to open a new business bank account as they cannot transfer it on our company name. I cannot get any clearance from the third party what sort of bank account it is- assume it one of "clients fund bank account"? My question is if the third party has to be a director of our company to be able to operate the current bank account? It is mission impossible to open new business bank account at the moment but we could do it promptly in Santander which is one of our directors bank but the problem is the requerement is only 2 directors maximim -again which is the case in reality if this third party would resign. Thank you

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By Paul Crowley
20th Sep 2020 15:25

If the bank account is a client account, other party operates it and should pay the balance to the new bank account.
Was other party a genuine director and registered at companies house?

Were the current 2 directors able to operate the old bank account?
Have they ever made a payment?

Not difficult to resolve. One of the two resigns, making sure that 3rd is appointed secretary. Secretary cannot be chair so proper director is de facto chair
Get the new, only, company bank account and resolve the rest later

Directors really ought to chat to someone who has company law expertise

You are only an employee
Director should be dealing with this

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By Asiko
20th Sep 2020 17:26

The problem is opening a new business account is a complete nightmare -I have tried all high street banks and some just not taking any applications and another have 6 weeks waiting list just to apply not for processing time. So we could use Santander but only with 2 directors. The best an simple solution would be just an open a new business bank account but not during COVID pandemic apparently. The third party is a genuine director -they really just secretarial/ booking services company registered with a company house so they would need to resign but they said they cannot do it at the moment as they will not have an access to the bank. The bank account is operated by the third party on our company instructions so the funds belongs to our company. No we cannot operate our bank account- we dont have an access to it and given instruction to them what to pay.

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By frankfx
20th Sep 2020 19:07

Never experienced this in practice.

Seems highly unusual that the trading company should not have a bank account in it's own right.

Or indeed full rights over the bank account operated by the services company.

Much of the above should be set out in the services company T & C's

Have a word with director.

He may delegate you to have a word with external accountants.... a reservoir of knowledge on the nitty gritty of the arrangements.?

Whatever the outcome you must ensure a seamless transition..... cash flow hiccups may have foreseeable disastrous consequences.
Your own job depends on this.

Assuming all this is above board.

The services company should have (?? ) good handover protocols, for which they charge.

Due diligence and preparation essential.

Let us know how things progress.
Please.

Thanks

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Replying to frankfx:
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By Asiko
20th Sep 2020 22:26

Yes first time happened to me as well- I worked in practice before and we never had full control over client bank account however I had CC of replay of Barclays business manager in Isle of White (now again why account was open there is a mystery for me as no sideways for tax avoiding) who confirmed that our company have to open a new bank account as we are not passing "a criteria". Did talked to external accountants -which is my former boss and they will do annual accounts +CT but they are puzzled as well. The service company has assured us to transfer the funds as soon as we open a new bank account and resign as a director. I am just trying to help my director in banking but all my contacts (and I have few) saying it is a very bad time ... Well need to find a solution without waiting list until Christmas. I really do not understand what is going on in the country proud to be the leader in financial services as banks used to fight over the clients and offer cashbacks/etc for a switch.

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By frankfx
20th Sep 2020 19:11

Never experienced this in practice.

Seems highly unusual that the trading company should not have a bank account in it's own right.

Or indeed" full rights "over the bank account operated by the services company.

Much of the above should be set out in the services company T & C's

Have a word with director.

He may delegate you to have a word with external accountants.... a reservoir of knowledge on the nitty gritty of the arrangements.?

Whatever the outcome you must ensure a seamless transition..... cash flow hiccups may have foreseeable disastrous consequences.
Your own job depends on this.

Assuming all this is above board.

The services company should have (?? ) good handover protocols, for which they may charge.

Due diligence and preparation essential for a simple successful transition, on an agreed time line.

Let us know how things progress.
Please.

Thanks

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By Paul Crowley
20th Sep 2020 19:22

This is common for Service charge companies.
Agent operates a client account in name of the company

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Replying to Paul Crowley:
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By Asiko
20th Sep 2020 22:28

I got it but do they have to be "a director"? My biggest question is if they resign we could open an account in Santander easily as in reality there are only 2 directors who are genuine directors.

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