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Difficult but profitable client - time to fire?

Difficult but profitable client - is it time to fire him?

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Hello,

that post is about one of mine profitable clients which has recently turned out to be very hard to work with.

A recent example - the client came to my office with another guy and asked me to appoint him as a director and a shareholder (50/50). The meeting was quite long and I explained all pros and cons to him regarding appointing another director and selling shares. They both agreed and I filled a return of allotment of shares and  AP01. Then sent both forms to the company's email address for online signature . It turns out that he had given access to the company email address to the new director who 'accidentally' signed the forms.

Few days later the old director contacted me and asked me to remove the other director. I explained it was not possible to do it without his consent, he cannot be forced out and I have no right  to do it. Then he started threating me that I have filled all forms to companies house without his permission... It’s probably time to get rid of him despite hi is still a source of revenue

How do you protect yourself from such cases?

Any thoughts will be appreciated

 

Replies (15)

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By B Roberts
19th Nov 2019 13:40

The fact that you asked the question gives you your answer.

I also understand the profitability element, however it is rather like resigning from a job you don't like and then staying because the employer offered you more money - the underlying issues remain and after a short while you are more unhappy than you were before, even though you have a little more money.

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Replying to B Roberts:
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By vfilipova
19th Nov 2019 13:52

I am also wondering if he can contact Companies house and say that I've done all this without his consent. Although I have all documents signed with his name on them. Just the signature is incorrect but -Am I supposed to inspect signatures ?

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Replying to vfilipova:
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By Matrix
19th Nov 2019 14:02

It sounds like a legal issue so be professional and tell your client to take legal advice.

There is plenty of work out there, I would also not be bothered about losing a client who threatened me.

Chin up.

(I checked something with my institute and insurers last week and the client said that was overboard! I told the client what I thought, I will decide how to run my practice, not my clients so this one is on the naughty list now!).

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Replying to vfilipova:
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By paul.benny
19th Nov 2019 14:17

vfilipova wrote:

I am also wondering if he can contact Companies house and say that I've done all this without his consent...

He can.

But the facts you have recounted say that the other director submitted the documents, not you. On that basis I can't see CH getting involved.

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By ireallyshouldknowthisbut
19th Nov 2019 14:48

There is actual time and there is emotional stress.

I find if I am thinking about a client in the shower or at night in a negative manner then they ought not be a client of mine.

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Replying to ireallyshouldknowthisbut:
By Red Leader
19th Nov 2019 15:01

Yes. For me it's as if there is only a certain amount of real estate in my brain. If one client is taking up more of that space than they should, it's time to think of getting rid.

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Replying to Red Leader:
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By wilcoskip
19th Nov 2019 15:04

Exactly. Bad clients drive out good, not least by stopping you thinking clearly.

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Replying to wilcoskip:
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By vfilipova
19th Nov 2019 15:53

Yeah, I guess you are right. Better get rid of him now ( in a professional manner of course ) :)

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Replying to ireallyshouldknowthisbut:
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By Rgab1947
27th Nov 2019 09:30

I do my best thinking in the shower.

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By lesley.barnes
19th Nov 2019 15:28

I would get rid of this client he will be a drain on your resources, he has obviously had second thoughts after your discussion. It's the clients own fault for giving the new Director access to his email and the new director has taken advantage and signed off the documents. You weren't to know - I take it the new director has forged the other chaps signature. If the old director was unhappy with the arrangement he should have contacted you and asked you not to complete the forms as he had changed his mind. No point in jumping up and down now and looking to blame you for his mistakes. As others have said its legal advice he needs now.
It's so liberating - I sent a client packing last week because he hadn't listened to anything I had said. Did it his way and then rang up to say he was in a mess and could we meet the day afterwards to sort it out. Not a chance find another accountant with lots of spare time was the reply.

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By towat
26th Nov 2019 10:36

If the non-director signed the AP01 surely they are not effective as they should be signed by a serving director?

On your main point, yes get rid of the client, yes yes yes.

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By brumsub
26th Nov 2019 10:37

A bit of a sticky wicket because you now have 2 directors.

Assuming he still is the contact director, I would write to him setting out the facts in a letter relating to the appointment of the new director; essentially what was discussed at the meeting, any reservations you had and what was agreed. Send by recorded delivery. Did you do any minutes and did he sign these?

Then politely advise him that his accusations are unfounded and if he persists then this would be a good time to part ways, etc.

Just keep it professional.

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Replying to brumsub:
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By vfilipova
27th Nov 2019 17:42

Yes will do, thank you

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By paddy55
26th Nov 2019 12:12

1. Had the new director been properly appointed in accordance with company law when he signed the forms? If so, it would appear that he was legally entitled to sign the forms. If the old director now wants him removed, he must do so in accordance with company law. If the old director owns a majority of the shares, he can call a company meeting and have him removed. If both own equal shares,it may need an application to the court to resolve the matter.
2. If the new "director"had not been properly appointed when he signed the forms, his signature has no effect and, if he knew that, he could be charged with an attempted crime.
In either case, I can see no blame attaching to the accountant.

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By geofflusk
27th Nov 2019 00:21

Get Them Gone

IMHO there is huge satisfaction in sacking a client who does not comply with your requirements. IMHO it shows strength and no dependency upon the fee income. It is about standards and we have to meet clients' standards, but if they do not meet ours, then au-revoir.

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