Reply to: "Personal undertaking statement"

[norrahe]

Good man.

Looks like they were just trying it on..... The scary thing is that some people would feel pressured into signing their life away with this.

Man????

Now they are trying to get me to tell them I will not invoke the substitution clause, agent was asking me to e-mail them back saying I wouldn't invoke the clause.

My reply was that If I give either verbal written agreement then it renders the clause null and void and can put me in very weak position should the Dutch tax office decide to investigate my company.

[Wanderer]

Told agency I was not signing this and thankfully they accepted my refusal.

Good man.

Looks like they were just trying it on..... The scary thing is that some people would feel pressured into signing their life away with this.

[Old Greg]

Told agency I was not signing this and thankfully they accepted my refusal.

Good work. Much better than walking away.

[norrahe]

Told agency I was not signing this and thankfully they accepted my refusal.

[Wanderer]

Other types of businesses including limited companies who need loans, particularly from banks, do.

Yes that is true. Directors and shareholders invest in the business and it will produce rewards if it all goes well or losses if it goes wrong. Loaning money to the company or acting as guarantor for a loan are good examples of this. The investor puts in money or guarantees a loan of a fixed value and that amount is the maximum exposure to loss that they have. In this case the potential losses are finite and a quantifiable and there is a very real possibility that they will make a good return on that investment.

However, the scenario we are talking about here is completely different. The agency are asking the director to personally underwrite an infinite amount of professional indemnity cover for absolutely no benefit or reward. That is what makes this totally unacceptable and we need to stamp down hard on agencies trying to pull that stupid trick.

[BS1397]

As well as my usual contract I got given a "personal undertaking document" to sign.

Walk away...

[mcquiggd]

I have a feeling that this is what will happen once again I will be at an impasse.

I don't have to worry about hector as I operate within Dutch tax law. Under Dutch employment law I have to have an employment contract with myco so MyCo is legally responsible for me.

The Dutch side have said that this is not relevant to me as this is a business to business contract.

Hi Norrahe,

I am also based in the Netherlands, and have Dutch accountants - what you describe is not a requirement from the Belastingdienst for example. Where is your client based? UK I guess..?

What is your setup..? B.V. ..?

Feel free to PM...

[norrahe]

Bloody hell yes! I really can't believe that anyone would even consider signing such a declaration. No one in their right mind gives a personal guarantee to underwrite the company's liability.

I trade as a limited liability company. If it all goes wrong then the company takes the brunt of it and if necessary I will close the company with minimal personal losses, that is the way businesses operate. If you give a personal guarantee then they will come and take your house, your car and probably your first born child too. Don't give me this tulip about insurance either, my ultimate insurance is that my company's capitalisation is £2 and this is the limit of my liability to it. Just say no to this tulip, it's the thin end of the wedge. Signing stupid stuff like this pretty much makes you a permie.

My sentiments exactly, am just getting the usual reviews done, IR35 doesn't actually apply to me but the working practices outlined in the contract under Dutch tax law have to be similar.

I have no intention of signing my life away and I fully expect to get bullying tactics from the pimp again, I've already told them to sod off on certain items before I even got the contract which they backed down on. I don't think they will on this.

Having been on the bench for five months, they probably expect me to bend over, I may do, just so they can kiss my ass!

[SueEllen]

Hence the two statements need not be mutually exclusive. If a bank wont give a loan without a personal guarantee, then that alone should send a signal to the director.

Perhaps they should fold, lose the business but keep their house, rather than betting it all.

It's been common for years for banks to do this.

It doesn't mean the business isn't viable it's just used as a way to stop people f***ing up on purpose and thinking they can get away with it.

[centurian]

No one in their right mind gives a personal guarantee to underwrite the company's liability

If you google you will find some horror stories of men in this situation who have killed their families and then committed suicide.

Hence the two statements need not be mutually exclusive. If a bank wont give a loan without a personal guarantee, then that alone should send a signal to the director.

Perhaps they should fold, lose the business but keep their house, rather than betting it all.

[SueEllen]

Bloody hell yes! I really can't believe that anyone would even consider signing such a declaration. No one in their right mind gives a personal guarantee to underwrite the company's liability.

Other types of businesses including limited companies who need loans, particularly from banks, do.

That's why you hear of businesses going bust and the director losing his house, his children being take out of private school etc. (I've actually met people who this happened to.)

If you google you will find some horror stories of men in this situation who have killed their families and then committed suicide.

BTW The best contracts I've had limit the liability to the amount the company earns from the contract. This is good if the contract turns out to be short.

[Wanderer]

The reason you operate through a Limited Company is (the clue is in the title) because you have "limited" liability should anything go wrong. Back this up with relevant insurances and working practises and you should be safe commercially and from Hector (IR35).

There's a lot of this type of thing going around.. it seems the Pimps are getting really twitchy in the current climate and want push ALL risk down the chain to you. Personally I'd tell them to go jump.

Bloody hell yes! I really can't believe that anyone would even consider signing such a declaration. No one in their right mind gives a personal guarantee to underwrite the company's liability.

I trade as a limited liability company. If it all goes wrong then the company takes the brunt of it and if necessary I will close the company with minimal personal losses, that is the way businesses operate. If you give a personal guarantee then they will come and take your house, your car and probably your first born child too. Don't give me this tulip about insurance either, my ultimate insurance is that my company's capitalisation is £2 and this is the limit of my liability to it. Just say no to this tulip, it's the thin end of the wedge. Signing stupid stuff like this pretty much makes you a permie.

[norrahe]

I've used Bauer & Cottrell for years and they are excellent. They do have a standard 5 day turnaround (which they always achieve) but are responsive to urgent requests; I've had a 1 day turnaround before now.

WHS.

B&C are always my recommendation. If you need a quick turnaround, you have to tell them (and pay a little extra) and they can give you a response within 24 hours (providing all info is available to them).

Thanks guys QDOS got back to me in the end and its all in hand. I've used QDOS when I was living in the UK and found them to be really good.

[craig1]

My current contract is direct with a client. Their HR people tried to get me to sign a statement that said (essentially, can't remember every word!) "I confirm that I have been informed that it is a matter amounting to gross misconduct for an employee to trade in equities or shares of a company that is a client of X".

I signed it after taking advice. The advice was that it was nice that they told me that but utterly irrelevant because I'm not an employee.

[BolshieBastard]

I've used Bauer & Cottrell for years and they are excellent. They do have a standard 5 day turnaround (which they always achieve) but are responsive to urgent requests; I've had a 1 day turnaround before now.

WHS.

B&C are always my recommendation. If you need a quick turnaround, you have to tell them (and pay a little extra) and they can give you a response within 24 hours (providing all info is available to them).