Maybe be you’d like to enlighten us as to the legal obligations of a Company Secretary? Hint: the only obligations are the administrative requirements of the Companies Act – keeping the Registers in order and ensuring documents are filed with Companies House on time. The day to day running of the company and responsibility for the company’s actions are the directors’ responsibility only.
I completely agree that company law is a farce and virtually a licence to commit fraud; it will only get worse when the new Companies Act comes completely into force – single person companies with no Company Secretary, Directors’ residential addresses kept private and all sorts of other bollocks that will make things easier for fraudsters. One of the few useful things is that ‘shadow directors’ will become as accountable as registered directors for the actions of the company.
The idea is that if we don’t allow people to fuck their businesses up and walk away from the problems then nobody’s ever going to risk setting up a business. The economy will stagnate and we’ll all suffer. More intelligent people than any of us have come up with that over many years so we can only assume that they’re right. Seems like bollocks to me though.
I truly believe John to be a decent, hardworking and honest person and I’ve been more than a little upset by this recent bad fortune.
We can all learn a lesson from this: don’t allow more credit to one customer than you can afford to lose. If you’re getting in over your head with a big customer then think about taking out credit insurance – it should cost less than 1% of the outstanding debt. If you can’t get credit insurance on your customer’s debt then ask yourself if YOU can afford to lose the money more than the insurer can.
It’s hard to turn away potential business because of worries over your customer’s creditworthiness but unless you REALLY like living dangerously you have to assess the risk and act accordingly. The sad fact is that over half of the companies trading today will have failed within the next 5 years. Just make sure they don’t owe you more than you can afford to lose when they fail.
Posted under Late Payment, Legal Issues
Posted by Alec at 6:21 pm, June 11, 2007