Can i become a company director ????

[iva100]

I have been asked to become a director of an existing limited company..

It is a great opportunity however i am very worried about the following.

1. Can i become a director in an iva?
2. Will i be able to sign a bank mandate, will this affect the companies current bank facities, overdrafts etc ?
3. The company is an existing company with years of trading accounts, however i am not sure if these will be brought into account in regard to my iva ? the trading capital of the company etc?

PLEASE HELP I HAVE A GREAT OPPORTUNITY BUT AM SO WORRIED...

[Michael Peoples]

Hi IVA100.
There is nothing to stop you being a director of a limited company but you would need to review the articles of association and the other directors would really need to know.

The existing banking facilities should be unaffected and there may only be an issue should you be required to sign any personal guarantees. You would need to seek the permission of your IP to sign these and the lenders may not offer facilities since their security would be weak.

If you are only operating as a director and are not acquiring a shareholding there should be no implications for the company. You should contact your IP who will have full knowledge of your case and can advise accordingly. Good luck with the new venture and hopefully everything works out for you.

Finally, if the new company knows your situation and wants you on board they could offer a full and final settlement to your creditors so that you no longer have the restrictions of an IVA. You could pay this money back over time.

[MelanieGiles]

Are you already in an IVA, or just thinking of entering into one?

My personal view is that you should disclose your financial situation to your co-directors by way of transparency. It would be awful if you left your current job to take up this opportunity, to then find that they find out about the IVA and use it against you. If you are going to be going onto bank mandates, personal credit checking could highlight this.

I hope it all works out for you eventually.

[iva100]

I am already in an IVA Yes..

I already work for the company and have done for some time, they have now asked me to become a director.

My financial situation will not change only my status within the company.

I do feel, however that an IVA is very restrictive for anyone who is interested in improving their standing within the business world.

I think that raising the money to settle the IVA may be the best way as i am increasingly feeling bound in respect of furthering myself and business.

[Michael Peoples]

A settlement is a good idea if you can source the funds. We have closed down IVAs in the past for the sole reason that a client was to become a director and he wanted to be clear of any of the restrictions imposed under an IVA.

There is always a danger that an IVA can fail for a number of reasons and the ultimate sanction is bankruptcy. Since you cannot operate as a director when bankrupt this is a very serious threat which clients in particular want to not worry about.