RichieRuin
Registered User
- Messages
- 27
I set up a limited company a year ago and engaged an accountant to help with registration etc. Now she's doing my accounts and she has asked me to sign a personal guarantee and indemnity to say that if for any reason my company cannot pay her fees, I will personally pay them. There is also other stuff about holding harmless and indemnifying the accountant against any liability blah blah blah -- isn't that what professional indemnity insurance is for?
I'm not overly bothered by it because the cost should not be much (I've done all the donkey work - receipts, VAT, etc.) and the company is solvent but I never heard of this before and I'm just wondering if it's standard procedure to ask for it. Isn't the whole point of a limited company that it's a separate legal entity and the directors are not personally liable for its debts?
On a side note, I'm also a bit ticked off about the way the accountant handled it -- it just came in the post without any explanation, just a compliments slip saying "please sign and return".
Should I just sign it and say nothing? Or refuse? Ignore? Get another accountant? She hasn't had to do much for me so far but what she has done has been on the ball to be fair.
Is it an engagement letter she sent out to you- Tells who is responsible for what eg doing vat, paye/prsi etc.
What type of accounts are you getting done- Audit or Non-Audit.
Better off to get new accountant as asking client to sign a personal guarantee at this stage shows very little faith in client.
Tell her to take a hike. You're a limited company for a reason!
The company does not necessarily need to be audited just because it is the first year of trading. If you were told that I would have doubts about your advisor's competence.
Personally I will never sign a PG again, I made the mistake once and it took a long time to sort through pain and suffering.
I can understand it from her point of view but business is business and looking to move a business liability onto a personal level isn't a runner in my world.
If your particularly happy with her services and price then offer to pay a period in advance but don't sign up to a PG.
I am an accountant. I ask for personal guarantees from the companies that I act for.The way I see it if the company's directors refuse to sign the personal guarantee it indicates to me that at some stage in the future it is very possible that I will be left with a large debt and no my prices do not reflect a provision for large bad debts. Better off without this type of client. The attitude that prevails on this topic is that it is ok to set up in business, fail and leave a pile of debts after you. This is what has crippled many profitable business who have fallen at the hands of these fly by nights. Ask the many thousands of construction industry subbies burned by the reckless developers. I know there are many genuine cases where companies have failed but business people cannot expect their suppliers to assume the risk of a particular debt not being paid when they themselves will not assume this risk by providing a PG.
+1
I find mrblues' post particularly disturbing.
Any particular reason why?
I've been there, partner in company deserted, left me with huge debts which we had both PG'd against, I lost my house, cars and pretty much everything of worth I owned - has taken me 8 years to rebuild my business and life but now i'm there and have it all again.
All I am saying is that there are other ways to be fair in business and i've stated paying a period in advance is fine once your happy with her work!
I'm sorry to hear that you were "stitched up" by your former business partner. However, do you think it would have been fairer for the company's creditors to carry the can for the failure of your business?
I am an accountant. I ask for personal guarantees from the companies that I act for.
The attitude that prevails on this topic is that it is ok to set up in business, fail and leave a pile of debts after you. This is what has crippled many profitable business who have fallen at the hands of these fly by nights.
with every tom, dick and harry having the gaul these days to seek pgs from their clients, what is the point of having limited liability if everyone else out there is seeking to undermine it by seeking pgs?
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