Director is ignoring letters

Director is ignoring letters

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If anyone is still around after the farce of the new website design, would they be able to help with this please.

We act for a flat management company whose accounts are already very late to Companies House (£3,000 fine). Companies House are proposing to strike off the company which is where the main problem lies, as the company owns the freehold.

The director we ordinarily corresponded with, and is the only one with access to the bank account, has ignored over 20 letter/emails from us asking for the records. We have recently begun liaising with another director (after a blanket canvas of the apartment building, a tenant contacted their landlord who contacted us) who is obviously very concerned but cannot do anything, as they are not a signatory with the bank.

A number of other leaseholders have contacted us offering to help. Though none have access to any of the records. Therefore:

1. Does anyone see any significant problems submitting ‘dormant’ accounts to stop the strike off and correcting them in the future.

2. Does anyone have any ideas how to add a signatory to the bank account without the current signatories help? (New bank account required?)

I am aware that an ML report will be required for the funds in the bank accounts, if we do not receive the statements and can see where the money has gone. 

Thank you

Replies (8)

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By sqwint
18th May 2016 17:11

Are there other shareholders in the company as shareholders can request for a director to be removed and another appointed. The bank will take directorship into account for the signatories so a director voted off would no longer have signing power on a bank account.

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Tornado
By Tornado
18th May 2016 18:00

Depending on exactly what relationship you have with this company (presumably not a Director or the Secretary) then your responsibility is very limited. Under no circumstances prepare and submit a set of Dormant (or any other Accounts) if you have no authority to do this. Again, unless you actually do have a legal responsibility to the Company, the consequences are not yours.

This is a situation that should never have reached this stage, but I fully understand the problems of dealing with resident's flat management companies, and I made a decision a number of years ago never to deal with them any more. This perfectly illustrates potential problems.

If you want to help then you need to bring together those that are responsible, the remaining Directors and Shareholders. It is for them to decide what action to take and perhaps instruct you accordingly.

It might be a good idea to suggest legal help from a specialist Company Lawyer, but do not take on any responsibility yourself unless you are qualified to do so.

I know that you want to help, and may feel that you have a moral responsibility to do so but what you really need to decide is if you have any legal responsibility to do so.

I have to say, of course, that my comments are based only on the information that you have supplied and I am not giving you any professional advice to act on, but my comments and observations may help you to make your own decisions about this situation you find yourself in.

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By Tim Vane
18th May 2016 22:52

I would in general agree with Tornado, though I would add that you already seem to have acted outside your remit, have possibly been breaching client confidentiality and are presumably in danger of leaving yourself open to legal action.

You were presumably engaged by the board and I doubt you have authority to deal with the bank account, and with other leaseholders. If the board that appointed you is not communicating then you have neither an obligation nor a right to take matters into your own hands. You cannot act in loco directoris (an expression I have just made up but hopefully you get the point).

And why the ML report? You have a bank account that belongs to a company and no evidence that it has been used for dishonest activity. I am not convinced that wilful negligence by a director in paying his bills is grounds for making a SAR.

In short, I think you have done all that you can do and your only sensible course of action is to await instructions from the board. The fact that the board is not functioning is a problem for the shareholders, not for you, and my advice would be to disengage with immediate affect until matters are sorted out.

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By Synchro
19th May 2016 09:21

Thank you for the replies. Firstly I would like to confirm we would never submit accounts without the directors approval, any my first question was very badly worded if that is what came across.

The director who has contacted us, is seeking any work around to stop the company the being struck off in the next month, which is what I am attempting to ascertain if there is.

The simple concern we have, if the property passes to the crown, we could face a PI claim £2,500,000 as the individual flats would be worthless.

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RLI
By lionofludesch
19th May 2016 09:34

You can stop the strike off by corresponding with Companies House and, effectively, objecting to it. No need to submit accounts you know to be wrong.

Given the nature of the company, I can't imagine that everyone will be totally disinterested in compliance.

But there's only so much you can do. Just make them aware.

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Tornado
By Tornado
19th May 2016 10:01

"The simple concern we have, if the property passes to the crown, we could face a PI claim £2,500,000 as the individual flats would be worthless."

Just as an aside, even if the Crown owned the freehold, it would not invalidate any leases in force for that property. It does not matter who owns the freehold, the leases are just as valid as they ever were.

There is clearly, however, much more to this case than we know about at the moment.

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By bumpdinkwhallop
19th May 2016 15:59

Call companies house and explain the situation and ask for an extension to the strike off. If this request is unusually rejected then ask specifically what note you should put on the estimated NIL abbreviated accounts.

DO NOT submit dormant accounts...... submit abbreviated accounts. Put a note in the accounts which say something like this "Due to a lack of information being available these are estimated accounts. Once the relevant business documents are provided these accounts will be restated" Make sure the "Other director" signs the accounts before you file. The other director should provide a wet signature.

If it was me id have disengaged. The company can also be administively restored and this is a pretty straight forward process but requires all documents to be filed (accounts) and all fees and penalties to be paid before hand.

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