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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3665
Experience:  Solicitors 2 years plus PQE
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I became a company director of a small web design business

Customer Question

i became a company director of a small web design business 17 years ago. After two months I left my partner as i needed to earn money to support children and couldnt wait for the money to start trickling in. I have never earnt a penny from the company or been to any company meetings or anything at all to do with the company in these 17 years. This week, my old partner told me he didnt get around to removing me from the directorship and now the company is going through a standard tax audit from the tax man. im concerned that i'll be linked to any tax debt if he points the tax man to where I live. I also have a new company at my current address. Am i liable to tax debt. The company as far as I am aware is in good shape. how can I remove myself from it
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Under the Statute of Frauds 1677 you are not liable for another persons debt unless you accept such liability in writing (a company is a legal person). On the face of it a director is not personally liable for a limited company's debts. There are limited circumstances in insolvency where a director can be personally liable for a company's debt but if the company is solvent this wont be an issue. Ultimately if the tax man asks to speak to you, you will have to co operate, however you do not have too much to worry about, if they look at the company books they will probably see you have not attended a board meeting for 17 years and therefore not been involved in the management. You effectively resigned 17 years ago, so all you have to say to the tax man is that you have not had access to any company records in this period nor have you been involved in the management, and to the best of knowledge do not have any information on the company's tax affairs that you can reasonably comment on. I would also make clear that crucially at no point have you had any involvement in filing the company tax returns. If you want to resign, just send the company a letter of resignation (the register at Companies House is an administrative one only and it is the company's obligation to update it) - you can probably justify back dating the actual resignation as long as you explain in the letter that it should have been formalized 17 years ago and that your resignation did not happen as an oversight.