Business bank account for management company - PROBLEM!

[TonyRPH]

We, the apartment owners of our block have just taken over the freehold and wish to manage the block ourselves.

As part of this, an application was made for a business bank account, and the LTD company name was supplied, at which point the bank concerned pulled down all director info from Companies House, and auto filled a part of the application with the various directors.

This was all going swimmingly, until the bank sent out documents for each director to sign (I've not seen these documents - but I assume it's along the lines of the bank's T&C's) - and as I am the primary applicant, I will only receive said documents once all other directors have signed.

However here's the problem....

One of our directors recently moved into a care home and has been diagnosed with dementia - and at this stage the family have yet to obtain power of attorney / guardianship, which leaves us in a position where the application is unable to complete because of this.

I understand that we can remove this director from the board, however there is a legal process to follow, which will take some time (which we don't have).

Having looked at a couple of other banks, it would seem that they all operate in a similar manner - in that they require signatures from every director.
In our case assigning a PSC (Person of Significant Responsibility) is not an option due to the nature of the company.

So - if you have read this far - is there anyway we can legally open an account (business or otherwise) that doesn't require the participation of every director, and that can be used for monthly service charge payments, and make payments for utilities and so on?

Thanks in advance.

[Countdown]

OP - we had the same problem. (It was a Charity with 15 Trustees all spread across the world. However day to day running was done by 2 people)

It was unbelievably ridiculous. Eventually it was only resolved when we went into the Branch and spoke to somebody.

We have a related problem with Fidelity Fund Management who are refusing to release the Charity's £250k shares until we provide details of all 15 trustees

[2 sMoKiN bArReLs]

TonyRPH said:

I understand that we can remove this director from the board, however there is a legal process to follow, which will take some time

Without knowing the ins & outs, what makes this process time consuming? When I was in a similar situation I sacked our director over the phone whilst sat at the bank (much to their horror).

Is it not just a simple vote by the other directors?

As an alternative have you tried an online only bank, say Starling or Chase?

[TonyRPH]

2 sMoKiN bArReLs said:

Without knowing the ins & outs, what makes this process time consuming? When I was in a similar situation I sacked our director over the phone whilst sat at the bank (much to their horror).

Is it not just a simple vote by the other directors?

It is a simple vote, however there are processes to follow as outlined on these two links:

https://www.thelegalstop.co.uk/Corporate/Special-n...

https://www.lineshenry.co.uk/deal-company-director...

2 sMoKiN bArReLs said:

As an alternative have you tried an online only bank, say Starling or Chase?

I've had a look at the Starling requirements - they too need signatures from all directors (even if they're not signatories on the account).

[2 sMoKiN bArReLs]

I've retraced my steps. I sacked my director with no notice outside the regulations and took the chance that the director would not sue.

As the director was my girlfriend I figured I'd done worse over the years & got away with it.

I know it's tricky, but does the poor chap have enough lucid moments allowing him to sign?

[TonyRPH]

2 sMoKiN bArReLs said:

<snip>

I know it's tricky, but does the poor chap have enough lucid moments allowing him to sign?

We believe not.

[2 sMoKiN bArReLs]

Would he really sue then if you sacked him without notice (as I typed that it sounded terrible, but may be a solution)

Have you actually face to faced a bank to see what can be done? (It must happen all the time)

[TonyRPH]

2 sMoKiN bArReLs said:

Would he really sue then if you sacked him without notice (as I typed that it sounded terrible, but may be a solution)

Have you actually face to faced a bank to see what can be done? (It must happen all the time)

The family is likely to make an issue of it. Not worth the hassle.

A possible solution is to establish a new LTD company called xyz management LTD with 2 - 3 other existing directors, and then use that instead.

I believe it will have ti be added to the existing management company as an 'interest' (or whatever it's called) - I need to seek advice on this.

We are currently in a spot, as there are bills to pay, and nobody has been able to pay their service charge.

What a mess.

[Rufus Stone]

TonyRPH said:

2 sMoKiN bArReLs said:

<snip>

I know it's tricky, but does the poor chap have enough lucid moments allowing him to sign?

We believe not.

In which case he clearly cannot undertake his duties as a Director so you can terminate the appointment immediately.

[Mr-B]

Assuming the company was set up with model articles of CA 2006, then "The directorship will automatically terminate in cases where there is a written opinion by a treating doctor that the director is physically or mentally incapable to continue in the role for more than three months. No agreement of the other directors (as to the termination or as to whether the person in question in fact lacks mental capacity) is needed."

[TonyRPH]

Mr-B said:

Assuming the company was set up with model articles of CA 2006, then "The directorship will automatically terminate in cases where there is a written opinion by a treating doctor that the director is physically or mentally incapable to continue in the role for more than three months. No agreement of the other directors (as to the termination or as to whether the person in question in fact lacks mental capacity) is needed."

Problem being that we don't have access to this written confirmation. And the situation between 'us' and this director's family has become a little fraught.

We'll just have to wait it out.

[Panamax]

TonyRPH said:

We are currently in a spot, as there are bills to pay, and nobody has been able to pay their service charge.

Surely there's a very easy way through this. Individuals pay the bills direct and receive a matching credit against their share of the service charge. Then remove the director with appropriate notice etc. Sort out the cash flow later.

Edited by Panamax on Tuesday 5th December 14:14

[Wings]

I am one director of a total of five directors of a similar management company to the OP. Our company's bank account is with Lloyds Bank, with the bank only requiring the signature of directors authorised to sign cheques, in our case being just two directors. Surely in the OP's case, not every director will be either needed and/or required to authorise, sign a cheque.

[TonyRPH]

Wings said:

I am one director of a total of five directors of a similar management company to the OP. Our company's bank account is with Lloyds Bank, with the bank only requiring the signature of directors authorised to sign cheques, in our case being just two directors. Surely in the OP's case, not every director will be either needed and/or required to authorise, sign a cheque.

A I stated previously, this isn't even to gain signing power on the account - NatWest wanted every director to agree to T's & C's regardless of whether they were assigned signing power or not.

When I queried this with them, the only option was to remove the director concerned, which also meant removing them as a director on companies house.

Ironically, our last apartment block was also self managed, and also had an account with NatWest - and yet only two directors were named on the account.

[Wings]

TonyRPH said:

A I stated previously, this isn't even to gain signing power on the account - NatWest wanted every director to agree to T's & C's regardless of whether they were assigned signing power or not.

When I queried this with them, the only option was to remove the director concerned, which also meant removing them as a director on companies house.

Ironically, our last apartment block was also self managed, and also had an account with NatWest - and yet only two directors were named on the account.

Nat West is not the only bank your management company can use. My management company have used both Skipton BS, and presently Lloyds Bank, and both of only requested signatures of those directors signing, and/or counter-signing cheques etc. I would suggest you review the number of directors you require to sign cheques etc., and then go back to Nat West insisting that only directors required/authorised to sign cheques, should be required by Nat West to provide their signatures. If they are unable to accommodate your request, then there are plenty of banks etc., that I am certain can accommodate you. I, my management company have been more than satisfied with the service I/we have received from Lloyds Bank.