March 2001 - Small Business News

1. BUSINESS PROBLEMS

What is Happening in My Own Company ?

QUESTION

Could you tell me the extent of my powers being a 50% shareholder and director in the above company. My Managing director has excluded me from all affairs of the business, and I carry a substantial risk if the business should fail. I need to know my specific rights. The MD is a chairmen until the 3rd march 2000.

REPLY

'NORMALLY' 50 % of the shares would give you equal status in: the day to day running of the business, assets, liabilities and prosecution by government bodies for tax, health & safety etc. And for those reasons you must insist on immediate access to company accounts and documents.

Chairman status only has a deciding vote at meetings where the Articles of Association state this - which it 'probably' does not as most articles are of a basic format: i.e. two directors equals two-votes. However, even if the chairman had this vote they could not stop you from knowing what is going on.  

If you cannot work with your fellow director you can ask them to buy you out (at the going rate) and if they do not buy them you can offer the shares outside of the company. If you cannot sell the shares and the chairman is jeopardizing your interests you can go to court and get an order for the other director to buy your shares at the going rate. 

Since the chairman steps down in March you already have the quickest solution to your problem, and I'm sure in March you will fight your corner from a level playing field. Might be an idea to give the deciding vote/share to an unconnected professional who could act as a mediator.

2. ASK THE EXPERT QUESTION & ANSWER

QUESTION 1

What Happens when the Credit Agreement is Lost?

I had a loan with a bank 4 years ago, and I am now behind with my payments. When the bank wrote to me I asked for a copy of my original agreement. The bank wrote back and said they had misplaced my original file and sent me a replacement agreement to sign and return: but that I am still liable. Is this true? 

REPLY 1

In the age of technology, some understanding has to be allowed where once there was none. The necessity of original documents has slipped in recent years as judges appreciate (or appear to appreciate) the logistical problems this can cause. That said, some judges, some courts, and in some instances there will be no trial without the original document i.e. "I did not sign it", or "the goods on the agreement were not the goods delivered", the amounts or circumstances
involved are significant, or of major importance.

In a basic loan default litigation case we believe that a court would accept the copy document as 'evidence' of an agreement. Further documentation such as the creditors ledger record of a loan etc, your credit file, and that you have made payments would provide further evidence of an agreement. Judges are not best pleased where creditors fail to present their case immaculately but the judge will like a debtor even less for trying to take advantage.

There is absolutely no reason for you to sign a new agreement, nor should you. But, as we say, the creditor would not have to provide the original document to sue you: but they may not be aware of this, as many are not. And lets face it, if the depository where a bank stored all of its original agreements burnt to the ground, would all the debts be wiped out ...nice thought though.

QUESTION 2

Debt Just Wont Go Away - What Can I Do?

I am 31 years of age. At the age of 18 I got a bank account, overdraft without even asking of UKP1000! A visa with a limit of UKP1000! Credit, Credit, CREDIT! Having no real value of money or managing it, I spent believing I'd be able to repay. I did for a time though slowly but surely got in above my head and income expected never materialized. I was in DEBT  The total of debts amounted to some several thousand pounds. Non payments and I started receiving those dreaded letters and knocks on my parents door. I didn't know what to do and just hid rather than face reality. I was now 21/22 years of age and even went abroad for a year hoping things would just disappear!   On my return the letters had stopped though obviously found myself with a handful of CCJ's. Couldn't get a mortgage, bank account - nothing! For the last 8 to 9 years since, everything has been cash and rented accommodation between living with my parents, who have never included me on the electoral register as every few months I'd go off and rent some where. I'm renting now with my partner and her children and we are on the electoral register.

We wish to buy our own property, though am afraid to apply as believe we shall be turned down due to my record and do not wish to open up issues of bad debts I obtained many years ago. As they were at least 8/9 years ago will my CCJ's still be recorded as I never settled them? It is extremely frustrating as I have suffered for many years and now am earning in excess of UKP25,000 a year with company car worth UKP25,000, partner earns over UKP20,000.

I'm now mature and manage money extremely well and have now for many years, I see people obtaining mortgages etc that are on half the salary I am and jobs not as secure as mine, I learnt my lesson and as a result of mistakes years ago I am more responsible with the care of money than any one I know and in my eye's should be a more than safe bet with any lender due to my current position financially and past experience as I won't make them again! 

I pay over UKP500 a month rent, always on time, gas UKP20 a week, electric UKP12 a week, always money to spare! Needed a computer so got my mother to sign the agreement in her name for a years interest free credit, 10 months later paid in full! Helps her rating not mine! Motocross bike UKP3,500, got father to sign credit, I paid for it no problem, though doesn't help me! I could go on and on. What should I do? 

(A Further recent question on this subject)

I have a mortgage (with my partner) & had no problems obtaining this. I've been living in my house for 8 months. I have no credit cards & to my knowledge have never been late on a payment & have no CCJ's etc.

REPLY 2

First, if you have never checked your credit files do it now. There are two companies that supply 99% of all credit reference requests:

Consumer Help Service
Experian
PO Box 8000
Nottingham NG1 5GX

Credit File Advice Centre
Equifax
PO Box 3001
Glasgow
G81 2DT

Write to both companies with all of your addresses in the past 6 years (provide postcodes, go to Royalmail if you need them). If there are two of you, married or not, you will need two separate applications. Send each application with a UKP2.00 cheque, payable to the name of that company. The information will be sent to you in about 14 days.

A useful booklet that explains what to look for and what to do if you see any problems will accompany the information you receive.

I suspect that all of your past debt problems will not be on the reports, and that you will then be able to apply to a main high street lender at the low rates afforded to those with clean records. If you do suffer any problem it will be due to NOT having a credit record.

There may also be some adverse information about a previous occupant, or even someone who lived with you who does not now: in such cases writing to the credit agency can pay dividends and the offending information removed from your record: as it should be!   

The main issue here is to make sure that what should not be on your record has been taken off by the credit report companies BEFORE you apply for a mortgage etc.   

QUESTION 3 

Why Does My Record Show Criminal Activity?

I have been told I have a CIAFS Criminal Investigation Fraud thing on my credit file! Can you tell me what this is and why? I can't get credit!  

REPLY 3 

The Credit Industry Fraud Avoidance System (CIFAS) acts as a warning system to lenders that: 

a) an address has an association with attempted finance fraud

b) an individual has attempted financial fraud

The nature of 'fraud' ranges from incorrect application forms (as with Peter Mandelson MP who falsified a mortgage application saying he had no existing loans when Geoffrey Robertson had loaned him UKP375,000), to using aliases for minor credit transactions.

But, it is entirely possible (some say probable) that the information held under the CIFAS tag is as detrimental to the victims of fraud (say a stolen card that has been used without being reported - for any number of genuine reasons) as it is to the perpetrator of a fraud. 

You need to get your credit file: How to Check Your Credit File and discover which lender has provided details to CIFAS. You can then demand their response, and if that response is basically unfair and causing you necessary grief, ask them to remove it or you will ask the Office of Fair Trading to investigate your complaint. Many credit records have poor and out of date information with the credit reference companies lacking severe penalties for sloppy administration.

3. NET INFORMATION & LINKS

The Council of Mortgage Lenders

The American government has an on-line database dealing with fraud and scams. The following is the latest e-commerce stats::   

"Top 10 Categories" by number of complaints:
23% Identity Theft
11% Internet Services and Computers
9% Prizes/Sweepstakes and Lotteries
8% Internet Auctions
7% Advance Fee Loans and Credit Repair Offers
6% Magazine Subscription Offers and Buyers Clubs
6% Telephone: Pay-per-call/Information Services
5% Business Opportunities and Work-at-Home Plans
5% Charitable Solicitations
5% Travel, Vacation and Timeshare Plans
All remaining categories totalled only 15%.

Free Virus Software

If you are looking for alternative virus software. Thanks for the info Claire

4. TAX BENEFITS - UKUK

The Children's Tax Credit