EM8734 - Close Companies: Settlement Problems: Joint and Several Offers

Where there have been directors’ misappropriations and amounts are still outstanding at the offer date an offer signed on behalf of the company and by the directors jointly on the lines of EMapp1 letter 10 or 11 should be sought. This commits the director(s) who still have the benefit of the misappropriations to ensuring that the offer is paid.

It is also sensible to seek a joint and several offer from the company and its directors for a settlement not involving misappropriations when there is a genuine concern that the directors will liquidate the company to avoid payment or a long instalment offer presents a real risk of non-payment. By seeking a joint and several offer you are not asking the directors to fund or partly fund the settlement but rather to demonstrate that they have faith in the company being able to meet its liabilities. Essentially it is no different to the directors giving a personal guarantee to a bank etc. A joint and several offer for a non-CTA10/S455 instalment arrangement is included at EMapp1 letter 9.

When a ‘joint and several’ offer is accepted, the acceptance letter must show the names of all the persons making the offer, either by being addressed to `Mr A S, Mrs J S and XYZ Ltd.’ or, when the acceptance letter is addressed to the agent, by showing the names of the directors jointly making the offer as well as the company in the heading.