Legal Advise

Originally Posted by Ed

I think that this is a potentially hazardous area. I think that the possibilities of money laundering are very real. It's not good enough to turn a blind eye and not ask questions. You have to know your client and to know where the money is coming from.

That's an interesting perspective...

As a company Director I know I am ultimately responsible for the financial and legal well being of the company. However, I cannot be expected to ask every client "This money's not dodgy is it ?" As we would never have any business.

However, if I had concerns I would expect the company (probably me...) to carry out due diligence and be happy that the source of the money is bona fide. I'd keep the details of any information I had been able to find, just in case.

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If it were me I wouldnt do anything without extensive advice and support from a Solicitor specialising in Business/company law. But thats the way I am

Originally Posted by Jelster

That's an interesting perspective...

As a company Director I know I am ultimately responsible for the financial and legal well being of the company. However, I cannot be expected to ask every client "This money's not dodgy is it ?" As we would never have any business.

However, if I had concerns I would expect the company (probably me...) to carry out due diligence and be happy that the source of the money is bona fide. I'd keep the details of any information I had been able to find, just in case.

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True - but what is deemed as enough research into where the money have come from?

Originally Posted by need2ride

If it were me I wouldnt do anything without extensive advice and support from a Solicitor specialising in Business/company law. But thats the way I am

I know and I will be finding someone to advise me - but it bloody costs!

Originally Posted by Jelster

That's an interesting perspective...

As a company Director I know I am ultimately responsible for the financial and legal well being of the company. However, I cannot be expected to ask every client "This money's not dodgy is it ?" As we would never have any business.

However, if I had concerns I would expect the company (probably me...) to carry out due diligence and be happy that the source of the money is bona fide. I'd keep the details of any information I had been able to find, just in case.

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Steve - a lawyer friend of mine here in S'bury has recently served time and been struck off for turning a blind eye. He didn't know he was laundering money, simply didn't ask the questions that should have sparked some concerns - selling a property at significant undervalue, basically. The prosecution case was that selling a property worth £150K at £70K should have prompted questions, the defence case was that he wasn't a valuer and there might have bene good reasons for selling at undervalue. The jury decided that he should have asked what they were. Result - 18 months in Redditch nick, reduced to 6 months on appeal, and a wrecked career.

Personally I think the Crown were vicious and ruthless, and that Phil did not deserve to be prosecuted. But that's the way of the world these days

Originally Posted by Ed

Steve - a lawyer friend of mine here in S'bury has recently served time and been struck off for turning a blind eye. He didn't know he was laundering money, simply didn't ask the questions that should have sparked some concerns - selling a property at significant undervalue, basically. The prosecution case was that selling a property worth £150K at £70K should have prompted questions, the defence case was that he wasn't a valuer and there might have bene good reasons for selling at undervalue. The jury decided that he should have asked what they were. Result - 18 months in Redditch nick, reduced to 6 months on appeal, and a wrecked career.

Personally I think the Crown were vicious and ruthless, and that Phil did not deserve to be prosecuted. But that's the way of the world these days

Like I said, I'd have to be sure I was happy (due diligence) with the client. It's a difficult situation though, if I had any feeling that something could be dodgy I'd be up front and ask the question, at the end of the day it's my neck on the line....

[Spiderman]

One of the main reasons that i left the property sales industry was the Money Laundering regs.
Working in some of the most expensive parts of London meant that we had some very rich buyers and sellers. In the main very rich people dont take kindly to being asked about how they came about this money or if its legit.

I wasnt about to insult people by asking them and the dodgy ones know how to mask it up well anyway so whats the point? I felt that was something the legals should investigate or the land registry, not the bloody Estate Agent.

And Ed, you know that the courts always come down hard on those they see should have known better. Oh unless of course they are cops who were speeding

I think all the posts above have covered it by now, but my summary would be:

1) The 'limited' liability of a Ltd company only applies to any debts if the company goes bankrupt while trading legitimately. This is contrasted with a partnership or sole trader where your trading debts are your personal debts.

2) As a director you may be prosecuted if your company breaks the law. There are a lot of laws that apply to companies.

3) The particular problem in this case is the money laundering regs that apply to banking and property. What they call 'Know Your Customer' . I have no idea what these are, maybe spiderman's links above will tell you. But this may well mean that your initial concerns are valid.