Well, yes and no.
Do I have any personal experience of it? Nope.
However, since this is a client relationship to supply all the initial money, it has the potential to go very very wrong.
As purely an example...
Lets say you wave goodbye to your job, and everything rests solely on this new venture. Fine, great, the client has promised money on a given date. However, that promise is under the condition that he sees a return (be that property or money), and for reasons beyond your control, that return is not realised. The client then says that because (for example) their property isn't available to them, they aren't going to pay. Or they could say that they will pay, out of good faith, but only a small percentage of the money you were expecting.
Do you have the cash reserves to comfortably allow for this??
Back on the specific question asked, and this is strictly my opinion; when I deposit money in my children's bank account, I never have to tell the bank where I obtained that money from. Yes, I have to pay tax on it, but I never have to state where it came from (and in the past it's been sizable chunks due to work bonuses etc). Granted I'm not a business, but even back when I was self employed, I never had to show where the money had come from.
That's the tax man's job. If your expenditure outweighs your income, then the tax man would be interested.
Don't rely on this, the taxman can ask you to justify income or you pay higher tax. If its a Ltd company you MUST have audited accounts. Even when you think you are doing things right auditors can find mistakes. Then there is VAT man. If you think the taxman is difficult...! Don't rely on arguing your way out in this arena this is big time and these geezers are experts. You will only slip through if your dodgy in which case running a dodgy Co. Don't do it.
Of course, I could be barking in the wrong forest, let alone urinating on the wrong tree (I got that right, didn't I?
) and you could be liable, but I reckon that it'd be minimised. You didn't find the client, and for all intents & purposes, you may never have any dealings with the client. In which case you leave yourself open for a possible charge of negligence, but surely nothing more (innocent until proven guilty etc - haha).
Company director - you are responsible for knowing all your dealings and clients and to have thoroughly checked them out - legal bods can help you do this quite easily. Don't think you can blame the other director it won't easily wash and ignorance of the law is no excuse. There can be mitigating circumstances but you're a chnacer if you want to rely on that.
2p, spent. Factual? Not on your nelly! Opinionated, very.