Who's the boss?

pickarooney

What happens when the boss/owner of a company is arrested and charged with something serious (enough for bail to be denied)? Who decides who takes over running the business and how? If the boss is no longer in a position to sign anything, how would the administrative side of things work?

Mr E

If the company is big enough, I assume the board of directors would hold an EGM and decide between them?

Antilles

It depends on the company. A large one would have procedures in place setting out what happens if a manager is out of the picture but a small one quite possibly wouldn't.

pickarooney

I'm thinking 30-40 employees. I'm also thinking I should have at least some basic knowledge of how companies work.

There'd probably be some next of kin situation in a small enterprise, right?

Arfan

A company of 30-40 employees would be classed as a small company. Companies of this size would be Private Limited meaning there are a group of shareholders ranging from 2 to 50. These shareholders appoint one or more directors who in turn appoint a Chief Executive Officer to run the company day-to-day.

Often in small companies like these the shareholders will also be the directors and one of them will be the CEO.

In the event that the CEO was arrested the normal procedure would be for the nextmost senior executive to take on a caretaker role with approval from the directors. In a small company this is typically the Chief Financial Officer by dint of seniority.

If this became a longterm issue the directors would meet to decide on how to proceed, either appointing one amongst them, promoting tsomeone or advertising the position.

smcgiff

Ye may need to change your bank mandate to allow Ye to sign cheques. For this Ye will need a board meeting where new nominees are signed off by a director and the company secretary.


If the incapacitated CEO is the CS then you'll need to appoint a new CEO using b10.

I AM



sorry i've been resisting that every time i see this thread title

pickarooney

bluewolf wrote: »

I AM



sorry i've been resisting that every time i see this thread title

At least you didn't say Tony Danza.

Arfan

smcgiff wrote: »

Ye may need to change your bank mandate to allow Ye to sign cheques. For this Ye will need a board meeting where new nominees are signed off by a director and the company secretary.


If the incapacitated CEO is the CS then you'll need to appoint a new CEO using b10.

In my experience limited companies always require two signatures to a cheque and always have three signatories. Single sign cheques are more the province of the self-employed.

smcgiff

Arfan wrote: »

In my experience limited companies always require two signatures to a cheque and always have three signatories. Single sign cheques are more the province of the self-employed.

A bit random, but correct

Antilles

pickarooney wrote: »

What happens when the boss/owner of a company is arrested and charged with something serious (enough for bail to be denied)? Who decides who takes over running the business and how? If the boss is no longer in a position to sign anything, how would the administrative side of things work?

echo beach

Arfan wrote: »

In my experience limited companies always require two signatures to a cheque and always have three signatories. Single sign cheques are more the province of the self-employed.

That is correct but many small companies only have two directors, often the owner and their spouse, and either can sign cheques but it depends on what the bank mandate says.
Most routine payments to suppliers, utilities and wages would be on direct debit so a company could manage for a while without somebody to sign the cheques. The real problem would be buying or selling property or other assets.

pickarooney

Say the other director is not actively involved in the running of the business and an interim (or permanent depending on how the trial pans out) manager needs to be put in place. Who would be able to choose this person and validate his or her contract?

echo beach

A manager would have to be appointed by the board of directors. If the other director isn't active in the business they will probably have to get active, which might send your plot off in another direction.

If your story is set in Ireland remember that allegations of a serious crime aren't enough to mean bail is refused. Many of those accused of murder get bail.