Business question.

stevep1018

Hi.my brother is taking over a company and he has asked me to be put down as one of the directors of the company.what implications could this have for me if I agree.i won't have an income from it or have anything to do with the business....he just wants me as a director. I want to get a mortgage soon and would being a director of a company affect my chances.

exaisle

He doesn't need a second director. He can convert the company to a single member LTD company which can have just one director.
Being a director will have no effect if you have no income from the directorship.

stevep1018

exaisle wrote: »

He doesn't need a second director. He can convert the company to a single member LTD company which can have just one director.
Being a director will have no effect if you have no income from the directorship.

I've passed this onto him.i appreciate your reply.thanks

cacs

stevep1018 wrote: »

Hi.my brother is taking over a company and he has asked me to be put down as one of the directors of the company.what implications could this have for me if I agree.i won't have an income from it or have anything to do with the business....he just wants me as a director. I want to get a mortgage soon and would being a director of a company affect my chances.

Check into what are the implications on you if the company goes bankrupt or defaults on tax. You are tied to him and his actions

pedroeibar1

Go look at the ODCE website.

368100

exaisle wrote: »

He doesn't need a second director. He can convert the company to a single member LTD company which can have just one director.
Being a director will have no effect if you have no income from the directorship.

He'd still need a seperate company secretary........being a director does have impact even if there's no income taken, you still have a fiduciary duty to the company, obligations to ensure the company complies with company law, signing off accounts and there was a recent case where a director was held personally responsible for costs of a company

http://www.irishtimes.com/business/construction/company-owner-held-personally-liable-for-firm-s-failed-action-costs-1.3089207

OP obviously this is your brother who I'd assume you trust but if I were you I'd want to know the full details of what he's doing before I agreed to act in any capacity and possibly take independent advice depending on what sort of trading the company is going to do.

It shouldn't have an impact on a mortgage application if you're not going to have a liability from signing a letter of guarantee for company debts.

pedroeibar1

368100 wrote: »

It shouldn't have an impact on a mortgage application if you're not going to have a liability from signing a letter of guarantee for company debts.

Yes it will. The lender will do a search as part of the credit process and see that the OP is a Co. Dir. and will want to know what 'that' is about. As he has no idea of his duties (that will be clear to the lender) he is a non-starter as a credt risk.
as I said above he should Go look at the ODCE website.

368100

pedroeibar1 wrote: »

Yes it will. The lender will do a search as part of the credit process and see that the OP is a Co. Dir. and will want to know what 'that' is about. As he has no idea of his duties (that will be clear to the lender) he is a non-starter as a credt risk.

An ICB search doesn't show company directorship, and regardless, the OP should declare the directorship as part of the application instead of waiting for them to find it as that's what would raise questions.

If it's declared and there's no personal liability it's perfectly reasonable and explanation why the OP is acting as a director ive seen plenty of examples of this and never saw it impact a lending decision by the bank outside of reasons above....by the sounds of it they won't have duties but as I posted before, the OP should get the full details of what trading the company is going to do and exactly what his obligation survey are, I don't see why they would be seen as a bad credit risk on this unless the company itself is in trouble

pedroeibar1

368100 wrote: »

An ICB search doesn't show company directorship, and regardless, the OP should declare the directorship as part of the application instead of waiting for them to find it as that's what would raise questions.

If it's declared and there's no personal liability it's perfectly reasonable and explanation why the OP is acting as a director ive seen plenty of examples of this and never saw it impact a lending decision by the bank outside of reasons above....by the sounds of it they won't have duties but as I posted before, the OP should get the full details of what trading the company is going to do and exactly what his obligation survey are, I don't see why they would be seen as a bad credit risk on this unless the company itself is in trouble

Who mentioned the ICB or its role? Most applicants would or should know enough about borrowing before entering the process, including what the ICB and credit agencies do. Obtaining a loan should be viewed as a business project that requires preparation and understanding of what happens. Like not having a standing order/DD to the likes of Paddy Power, or high ticket items in lots of foreign cities if you are looking for a mortgage.. Applicants should also obtain an up to date copy of what is held on file by the likes of Experian. A diligent lender will find out about a directorship, either through a CRO search or a declaration on the loan application. Despite what you say, it counts.

The rest of your post displays a total ignorance of the obligations and liabilities of a director under the Companies Act and the code of good corporate governance, not to mention the sanctions available to the ODCE via the High Court when it is found there has been a breach of fiduciary duty.

If you are learning to be a loan officer I have twice suggested that the OP visit the ODCE site to read what being a director involves. I suggest you do the same before proffering advice on this topic.

stevep1018

Thanks for the helpfull replys.ive made my mind up and have decided against playing a part in his adventure but I do appreciate the replys

368100

pedroeibar1 wrote: »

Who mentioned the ICB or its role? Most applicants would or should know enough about borrowing before entering the process, including what the ICB and credit agencies do. Obtaining a loan should be viewed as a business project that requires preparation and understanding of what happens. Like not having a standing order/DD to the likes of Paddy Power, or high ticket items in lots of foreign cities if you are looking for a mortgage.. Applicants should also obtain an up to date copy of what is held on file by the likes of Experian. A diligent lender will find out about a directorship, either through a CRO search or a declaration on the loan application. Despite what you say, it counts.

The rest of your post displays a total ignorance of the obligations and liabilities of a director under the Companies Act and the code of good corporate governance, not to mention the sanctions available to the ODCE via the High Court when it is found there has been a breach of fiduciary duty.

If you are learning to be a loan officer I have twice suggested that the OP visit the ODCE site to read what being a director involves. I suggest you do the same before proffering advice on this topic.

Oh get off your condescending high horse and don't make presumptions of what my role is.

Most retail banks in Ireland use the ICB solely when credit checking for a mortgage which is why it's relevant, and which does not conduct a directorship search, if you don't know this then maybe you're not as informed as you think you are. In fact, some scorecard modelling for existing customers sanction smaller loans without any external credit search.

My post stated that the OP should investigate the full implications regarding directorship and take independant advice. I stand by what I said and I didn't make out that the potential implications listed in my post were a definitive list.

You've also bolded parts of my post without making reference to them, so I don't know what that's about, maybe you just got confused.

Going by your other posts, you seem to have an issue with banks and the people that work for them, so if that's what's driving your attitude i'll happily leave it at this.

pedroeibar1

The OP has his answer and made the correct decision. Post #2 was appropriate advice, you then interjected with your waffle. I once worked for a merchant bank (Forex, Lending and then Trade finance) so I do know how the system works. You are incorrect again about the ICB - have you ever heard of a judgement search?
As for your personal attack on me, it's just more waffle. The only issues I have with banks are the idiots who set and approved their credit guidelines. I also have scant regard for those who chased bonuses knowing that the loans they were shovelling out were totally unfeasible and in my professional career at that time said so. That is why I push for and support proper corporate governance and jump on those who suggest (as you did) that a directorship is no problem "If it's declared and there's no personal liability it's perfectly reasonable". There always is latent personal liability as a director, which is why there is an ODCE.
And you should check your terminology - Any gobs#1te can give out money, a banker is one who gets it back. Now stop digging.

368100

pedroeibar1 wrote: »

The OP has his answer and made the correct decision. Post #2 was appropriate advice, you then interjected with your waffle. I once worked for a merchant bank (Forex, Lending and then Trade finance) so I do know how the system works. You are incorrect again about the ICB - have you ever heard of a judgement search?
As for your personal attack on me, it's just more waffle. The only issues I have with banks are the idiots who set and approved their credit guidelines. I also have scant regard for those who chased bonuses knowing that the loans they were shovelling out were totally unfeasible and in my professional career at that time said so. That is why I push for and support proper corporate governance and jump on those who suggest (as you did) that a directorship is no problem "If it's declared and there's no personal liability it's perfectly reasonable". There always is latent personal liability as a director, which is why there is an ODCE.
And you should check your terminology - Any gobs#1te can give out money, a banker is one who gets it back. Now stop digging.

The only data held on ICB is that which LENDERS send to it with regards to lending held. Directorships do not form part of this data...... who mentioned Judgement Searches??

So you've "once worked for a merchant bank".....not a retail bank lending to consumers.....enough said.

Your argument has changed with every post you've made. Good day