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undischarged bankrupt & company advice. Is the law black and white?

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  • undischarged bankrupt & company advice. Is the law black and white?

    Hi all, I hope someone can advice me on what I am allowed to do if anything.

    I am a recent undischarged bankrupt so have at least 11 months left to be discharged if everything goes as it should. I will not go into the reasons why I went bankrupt as I do not think it is relevant to my question.

    I am no longer working as I resigned as a director of a company and have now left due to the bankruptcy.

    I was toying with the idea to start up a new business but as a undischarged bankrupt I know this is not easy!

    I have read if I choose to be a sole trader I must only trade under my name as this is the one which went bankrupt, If I have a trading name I am aware I would have to inform everyone I do business with I am an undischarged bankrupt which is not practical. For these reasons I dont think this is an option for me.

    My next plan was for my father to start a company as the sole director and I would be employed by him. I thought this would be fine / legal to do. Citizens Advice told me it would be!
    After spending a couple of weeks, building a website, getting business cards made, enquiry about insurance etc I came to the point where I was going to ask my father to form the company to make it official. I decided to double check the rules of being an undischarged bankrupt and this is where I hit the hurdle.

    Quote from website, They all same similar.

    "First things first, if you declare yourself bankrupt, you cannot be a company director of our own company or any others while the bankruptcy is undischarged. You are legally prohibited from managing, forming or promoting a limited company without first obtaining permission from a court."

    I knew I could not be a company director but the working says "You are legally prohibited from managing, forming or promoting a limited company"
    Looking at the wording slightly closer....
    1. I would not be managing as all decision making and business running duties would be carried out by my father, I would be doing the physical work / jobs.
      I'M ok on this point I think?
    2. The next point is slightly difficult one as I may have input with my father in regards to forming the company but at the end of the day, He will be the sole director, shareholder and be putting up the capital. Think I can pass on this point too?
    3. Third and final point. prohibited from Promoting a limited company. Forget about me wanting my father to start a company for now......How do I legally go and get a job for any other limited company and tell my new employer that I cannot recommend there company as ill be breaking the law. This seem bonkers and absurd. Now back to my father company. I have the same problem. How can I help any company that I work for grow If I am not legally allowed to promote them???????
    I have read everywhere that I can apply to the courts for permission, but the is nothing on the internet indicating on how to do this.

    Going bankrupt has been a horrible thing to do and I trying to do thing 100% perfect moving forward but it seems I may be commiting a criminal offence getting a job for ANY limited company.

    I am after any advice which can help. Please note. I am a google warrior so I am after advice not easily found on the internet if that makes sense.

    If you got to this point, Thanks in advance for any advice and also for reading

    Tags: None

  • #2
    As no reply here I posted on UK Business Forum and receive good advice. To help others, please see the post



    • #3
      You would be a shadow director in any event which is totally against the rules, illigal and your new company would be a phoenix company (rising out of the ashes of your banckrupt company. You risk being struck off as a director for many years to come.


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