An Open Invitation To Criminals, Money Launderers, Con Artists?

[Deliverance]

I know of a Company incorporated in the Isle of Man that for two years traded with two directors, one of which at the time of his appointment was an 11 years old child.

 

I telephoned the Financial Supervision Commission to ask what was the minimum legal age to be director of a Manx Company and was told in a flustered manner that it was not possible for them to divulge that information. I was perplexed by this response.

 

For clarification through an MHK I asked the Attorney Generals advice on what Company law in the Isle of Man states is the legal minimum age for directorship of an Isle of Man company and was told that the legal minimum age to be a director on the Isle of Man was 18, however I believe there is nothing specific in the Companies acts to state this requirement, I think it would possibly be covered by contract law (i.e. being of age to make a binding contract), I stand to be corrected.

 

Since this matter has now been brought before the Courts on the Isle of Man I was advised by an Advocate that a Deemster yesterday said it did not matter that one of the company's only two directors was a child. The Advocate asked if that was the case, was it ok for a Manx company to have two 2 year olds as the only directors, I do not believe this question was answered. I am awaiting a transcript for the exact wording.

 

On a separate point I also know of another Manx company that was struck of the register in early 2005 but continues to operate a bank account despite the bank in question being told on several occasions that the company was dissolved.

 

The two companies which for legal reasons I shall not name worked in tandem and from the same offices.

 

I pose the following question:

 

When a Manx company is incorporated and an Manx Bank is asked to open an account for that company there is a requirement for compliance with FSC regulations that the bank is provided with certified copies of "the articles of association" and "the certificate of incorporation" and also proof of id for the directors/secretary of the company, however there is apparently no further requirement for the bank to do anything further (even after being told on several occasions that a company is dissolved and struck off the register, or after the directors have been changed from adults to children), so in essence with the above information is the Isle of Man not a open house for criminals and money launderer's to buy a company off the shelf in the Isle of Man, appoint two directors that are below the age to make binding contract, or even below the age of criminal responsibility, let the company fall or be struck off the register and continue trading with a Manx bank account illegally and have no liability either contractually or criminally?

 

Offshore tax havens like the Isle of Man come in for a lot of flack for lack of governance of financial affairs, but I personally think this "Mickey Mouse" set of affairs is an open invitation to criminals, money launderer's, fraudsters etc.

 

It would also be an interesting point to know how many directors of Isle of Man companies are below the age of 18, and further still how many of those under 18 are below the age of criminal responsibility.

 

Any views on this?

[ian rush]

Go to the FSC or FCU

[Gladys]

Interesting points Deliverance.

 

As for a minimum age for directors, there isn't a statutory minimum, although there may be case law on the point. But being a director involves assuming legal responsibilities and it is arguable that the appointers would be held to book for appointing someone without the legal capacity to accept those responsibilities. There is probably a good argument also that the director of responsible age would be held accountable for allowing the situation to continue and not taking steps to seek the appointment of another responsible director. Perhaps also the parents would be held accountable as being the child's guardians and potential shadow directors. It's possible that the appointment was never valid as when signing the acceptance the child never had the legal capacity to do so.

 

 

The capacity to contract for minors is hazy as the law recognises a minor's ability to enter into an enforceable contract providing it is consistent with the requirements of the child. There is a case where a minor bought some waistcoats (obviously an old case) but did not pay and the court held that for that child the purchase of waistcoats was consistent with his requirements, despite his age, and the contract was enforceable against him. Hence, a child can buy sweets, the purchase is a contract. This is why so many mail order adverts stipulate that respondents must be aged 18 or over, because it is unclear as to whether the contract would be enforceable against anyone under that age, so they require respondents to warrant that they are of full legal age.

 

Either way, it would be very hard to see a court holding the child responsible.

 

Sounds like someone had a good wheeze for avoiding the liability attaching to directors, but didn't really think it through.

 

As for the second point, whether its a money laundering scam depends on whether the account is being operated or is just lying dormant since strike-off and cannot be closed as there is no one to close it! The latter does happen when companies are abandoned and, unless the outoing directors can be persuaded to write to the bank to close the account, no amount of letters from anyone else will do anything to change matters. In any case, if the company has been dissolved then any remaining assets will revert to the Crown (probably IOM Treasury over here).

[nipper]

A friend of mine had a school holiday job in Athol Street. It was to become secretary of lots of companies - just signing papers all day with his name.

 

And before answer machine technology and call forwarding etc. a girlfriend had a job in an empty office near Athol Street. She just had to answer the phone and take any messages. It was extremely well paid and she answered that phone about twice a month. I think there were more wrong numbers than genuine calls. Although the wrong numbers may have been someone testing the company existed and had an office on the Island.

 

She had the best filed finger nails I've ever seen though.

[Gladys]

Never sign anything unless you understand it. Your signature is a dear commodity and once you have applied it to a document, it is very hard to reject. Signing as a Secretrary is a little safer as often you are only signing on behalf of the Board or with the authority of the Board. Just make sure that authority has been given.

[manxchatterbox]

If anything goes wrong then surely the defence is that "Dieter did it".

 

http://www.eurogamer.net/article.php?article_id=63019

 

 

or just plead ignorance of the subject...(Tessa Jowell)

[Amadeus]

If anything goes wrong then surely the defence is that "Dieter did it".

You can't blame ze Germans for everything, you know... Besides: Why didn't they just match the DNA on the airbag with his? Surely possible...

 

He should have gone to prison for crashing that car, though - pref. an Italian one...

 

[Mission]

He killed an Enzo.