The protection of a limited company.

[PSK]

Most will be aware that the director of a company has some protection from personal liabilities except for some negligent acts and gross misconduct. I received a contract from an agency that, either by accident or design, appeared to risk pulling the contractor personally into the liabilities and indemnities that might arise. I thought I'd mention it in case it was of interest to anyone who reads their agreements.

As an aside, can anyone recommend a good commercial solicitor who can undertake commercial rather than IR35 reviews. I was sufficiently concerned by the range of the issues in the contract that I'd welcome a second opinion.

[yorkshireman]

Most will be aware that the director of a company has some protection from personal liabilities except for some negligent acts and gross misconduct. I received a contract from an agency that, either by accident or design, appeared to risk pulling the contractor personally into the liabilities and indemnities that might arise. I thought I'd mention it in case it was of interest to anyone who reads their agreements.

As an aside, can anyone recommend a good commercial solicitor who can undertake commercial rather than IR35 reviews. I was sufficiently concerned by the range of the issues in the contract that I'd welcome a second opinion.

Have you discussed the clauses with the Agency to see what their interpretation of them is?

[craig1]

It's becoming quite standard for some big businesses to tie in smaller ones with director's guarantees. The banks started it to the point that, unless you've got enough liquid capital to pay off the loan immediately, a bank won't lend a small business money without a personal guarantee from the directors. Plenty of small businesses have gone under and taken their homes with them because they didn't read the small print that they were signing away limited liability protection.

Unfortunately, this has caught on and more and more companies are tying in smaller businesses with these personal guarantees. I can see the time coming in a few years where having a limited liability company is pointless in protecting small company owners and directors.

I'd rather walk and be benched than sign a personal guarantee. Sign everything on behalf of the company and refuse anything that ties you personally into liabilities.

[SueEllen]

As an aside, can anyone recommend a good commercial solicitor who can undertake commercial rather than IR35 reviews. I was sufficiently concerned by the range of the issues in the contract that I'd welcome a second opinion.

Any solicitor who deals with commercial contracts should be able to sort that out as they are all taught contract law.

One regularly mentioned on here is Roger Sinclair - Contract lawyer (UK) Roger Sinclair Egos Ltd

I would suggest you put in writing exactly what clauses you want him to pay particular attention to so there is no confusion.

[PSK]

Thanks for the replies. I could remember previous posts mentioning Roger but couldn't remember his name nor find it through a search.

I think I wanted a solicitor who understood the market and the nature of one person contractor/interim/consultancy work. I contacted a few commercial firms but didn't like their pricing nor feel they understood the nature of the business. I'd done the legwork myself given my background but wanted the comfort of a second opinion.

I've been in discussions with the firm since the original posting but thought an update might be of interest. After discussions with the firm's legal advisors, it seems it was deliberate drafting done 'subtly' (as they said). The drafting wasn't as explicit as a reference to director's guarantees, rather some apparently mild statements that brought me in personally. I can't blame a firm for minimising it's commercial exposure but felt midly unhappy all the same.

[cojak]

But isn't that the point of professional insurance?

The contract simply need state the the supplier company must have appropriate insurance.

[stek]

Google 'lifting the veil' (of incorporation), basically allows the authorities to go for you as a person rather than you as a director of legally separate body.

[oversteer]

They'll only do that if you seriously take the mickey. Like, big style fraud.

As mentioned above, personal guarantees are popular. Sign them at your peril, especially if it's at the whim of a bank.

[SueEllen]

But isn't that the point of professional insurance?

The contract simply need state the the supplier company must have appropriate insurance.

Which is actually better than going after the director who may have put everything of value in his non-director wife's name.

[xoggoth]

Don't think this is new. Way back in permie days when I was involved quite a lot in bidding some primary contractors would try and tie us up in liability clauses that way exceeded our interest in the bid.