Does anybody know the definitive answer to any conflicts between holding a Company Directorship and having an IVA? Many (in fact most) IVA Company web sites either say an IVA does not "effect the ability to be a Company Director" or that "you can remain a Company Director"...that only works if your Company Memorandum Articles of Association have not adopted Clause 88 of the 1948 Companies Act...as that lists a reason for 'disqualification if a Director has made an arrangement with his Creditors'.
I have an IVA and now my fellow Directors in my business are trying to force me to resign for that very reason. I think that Directors should be made more aware of this by the Insolvency Practitioners who run your IVA...if you get on with your fellow Directors I think you can then resign, then they change the Articles to remove clause 88 and say it is okay for Directors to make arrangements with their personal Creditors, then they can re-elect you as a Director. BUT....if they want you out they can use this to make you resign.
Anybody out there been in a similar position?
I know I should have consulted a Solicitor before I signed up for the IVA, but if I had the £400 for an hour of his time in the 1st place I wouldn't have needed an IVA!!
Hi Hepdog. You are correct as are your fellow directors. Before the IVA was approved did your IP run a company search and request the articles of association? This would have alerted you to the problem and you could have discussed it with the other directors before committing to the IVA. Obviously the IVA could be in difficulty as your income could decrease so this issue would need resolved quickly.
I didn't think there was any automatic notification other than the Insolvency Register.
A bit worried since I sit on a couple of boards as an unpaid Director in an advisory/committee capacity. Have no idea whats in the Memorandum Articles of Association etc
Hi Soreloser. You should be OK as your situation does not affect the solvency of the company and it's ability to obtain financing. It is possible that Hepdog may have director's personal guarantees which are now effectively worthless and the responsibility of the other directors. Not knowing the full facts of his case I would be loathe to speculate but I do not think that you have much to fear.
Thanks Michael - hope you're right. Publicity about my situation might cost me my job which is why BR was not an option.
I did wonder about resigning before now, but I believe I do make a worthwhile contribution and some good comes of my involvement. All the work is 'not for profit'.
Hi
My IVA was discovered when an email from my IVA company emailed me at work when I was on holiday and it was read by another Director.
Any Company that has followed 'Table A' of the Company Acts and incorporated it into their Articles of Association have every right to ask you to resign as an IVA disqualifies you but you can be re-appoionted
soreloser wrote:
How did the other Directors find out...?
I didn't think there was any automatic notification other than the Insolvency Register.
A bit worried since I sit on a couple of boards as an unpaid Director in an advisory/committee capacity. Have no idea whats in the Memorandum Articles of Association etc
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Hepdog wrote:
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Hi
My IVA was discovered when an email from my IVA company emailed me at work when I was on holiday and it was read by another Director.
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Hepdog, if you do get removed from your firm bacause of this email that got into the wrong hands, you may want to explore legal avenues to get Compensation.There are stringent Data protection and Privacy laws and I wonder (unless) you requested correspondents to sent to your work address protocol has been broken? Businesses can be fined, even your IVA firm for not taking due take in disclosure and leading to your lost of employment.Consult a lawyer if need be.
I thought you had announced you are in an IVA to your board before getting into this pickle.
