One of the things I find most baffling is when somebody appoints a family member as a business partner or a director of their business, without considering the implications. It is often done so they can help out with paperwork while the husband does the manual work (yes, I know it may sound like a stereotype, but this is what we are seeing.)
Even worse is when we hear that the mother is the sole director, while the son is a subbie to that firm. This normally appears to be related to avoiding liabilities from a divorce. It’s all well and good for the contractor to be relying on their loved ones, but what if it all goes wrong?
A wife, who is a company director or a in a partnership, could end up in enormous trouble if there is an accident on site, for example. She could end up being jointly responsible for Health and Safety failings, and even prosecuted. There is nothing wrong with having a ‘loved one’ involved in your business, but they need to be fully aware of their responsibilities, and I fear too often they are not.
My advice is to seek professional legal advice before you ask a family member to join you in your business. Things do go wrong, and everybody needs to be aware of their responsibilities before crunch time.
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