oops I lost my house!

[bullcar]

Been checking the way corporates and clients (traders) are or are not covered in the event of a corporate trading disaster.

Public co. (eg Goldman Sachs) shareholders lose the money they invested in the shares. The traders who are employees lose their jobs.

Private Co Ltd (eg Kyte) shareholders take a bath, but limited liability. the traders lose the trading capital that was in their trading account.

Members Club ( e.g Traders Clearing Alliance). Members lose their shirts, but not limited to the funds in their accounts. Traders there could lose their houses too!

 

[DT]

Members Club ( e.g Traders Clearing Alliance). Members lose their shirts, but not limited to the funds in their accounts. Traders there could lose their houses too!

Surely the simple solution would be for the members to trade via their own ltd company and then they would also only potentially have the funds in their accounts to lose? Presumably some of the tax implications of this would also be beneficial? Regardless of the apparent higher risks that some on this board have pointed out (Re: TCA potentially having to pass on one traders losses to the rest of the members) there must still at least be ways of limiting this potential risk to just the amount in the account.

Though I have to say I'm not an arcade trader and have no experience of trading in an arcade (though would like to one day) so before anyone shoots me down in flames I fully admit that I may very well talking out of my 'hoop' so to speak.

 

[bundbaby]

But in that case I assume it would not be a members club. It would be a closed shop effectively with all the initial shareholders being the owners, but any newcomers being outsiders (ie not shareholders). Your idea is good though but may not be as simplke to achieve as you think.

 

[Directional]

Members Club ( e.g Traders Clearing Alliance). Members lose their shirts, but not limited to the funds in their accounts. Traders there could lose their houses too!

Actually, you're wrong. If you had taken the time to read the Clearing Alliance website before coming out with such crap, you'd see that they state under "structure" that a members liability is limited to £1.

 

[bullcar]

A question for u Arb. I understand there are no directors and that the members are the decision makers. Thats the gist of the web-site. Is that correct?

 

[Directional]

I dont know enough about the specifics of the alliance to comment, but you can read up about LLP's at the comanies house website: http://www.companieshouse.gov.uk/infoAndGuide/llp.shtml

 

[bullcar]

Arb, TCA website quotes refer to a firm set up for the members and run by the members. THATS the SPIN thats put on this.

A not for profit organisation. You now say LLP.

However IN LAW an LLP must be a company of shareholders whose common aim is to make a profit.

IT IS FLAWED and thats just one reason why you and your mates will loses your money and more.

Im not being vindictive I am trying to help you guys at TCA understand what you got yourselves involved in

 

[Directional]

you're right, I dont know what the TCA is, whether its limited by guarantee or LLP or what type of association they have, I made an assumption but I dont actually know and should have checked before I posted. From what I understand, they are working towards charitable status.

But YOU should also have checked your facts before you posted such rubbish that members lose their house, when it says on their website that liability is limited to £1. Thats just scaremongering on your part.

 

[bullcar]

No its not Scaremongering - its fundamental to the corporate structure - IF ITS FLAWED that limited liability will not hold up in court. Thats why your house is on the line.
Further, those responsible for a business can be sued beyound just their shareholding. They can be sued personally. Arb you need to listen a little more

 

[Directional]

how can you expect to be taken seriously by saying that a legal structure formulated through companies house will not hold up in court. Thats like saying a shareholder in a firm will be liable for more than the extent of his shareholding.

if you're so keen to scaremonger, why dont you phone up and find out what the real facts are and then post about them since you seem really so bothered about it, rather than making stuff up

 

[turtle trader]

No its not Scaremongering - its fundamental to the corporate structure - IF ITS FLAWED that limited liability will not hold up in court. Thats why your house is on the line.
Further, those responsible for a business can be sued beyound just their shareholding. They can be sued personally. Arb you need to listen a little more

Whats your interest in this BC? Are you really so concerned about other traders potential liabilty, or do you represent more traditional clearers who are getting worried about what TCA are doing?

 

[bullcar]

Arb WAKE UP to the big bad world.
This kind of stuff goes to court every day. TCA is flawed. It was conceived out of a good idea, but set up so badly its embarrassing. Why dont you LISTEN to whats being said and take it in instead of aguing all the time?. Why are you so keen to blindly accept their smokescreen?
What I have said here is 100% valid.

 

[Directional]

well, because you dont have the facts either. You dont seem to be posting from any knowledgable position, but rather from false assumptions - and seemingly with the objective of discrediting the TCA, which instantly makes all your claims doubly suspect.

And the moderator aleady pointed out that you and bundbaby work from the same IP which is probably why both your posts have the same rhetoric

 

[bullcar]

No, no , no , no , no.
I did phone and speak two a guy called Steve Davis two or three weeks ago.
The company has been promoting a not for profit scenario. An LLP and I quote must be by definition: "TWO OR MORE PERSONS ASSOCIATED FOR CARRYING ON A LAWFUL BUSINESS WITH A VIEW TO PROFIT
therefore, someone has ballsed up!
ITS AN ERROR based on people like Steve Davis not understanding what hes doing and how he needs to go about things.
YOU my friend, are STILL NOT LISTENING

 

[TWI]

Bullcar, why do you persist in trying to protect other traders from TCA?
Are you a registered charity too?

 

[JonnyT]

Limited liability doesn't provide blanket cover.

If the partners are deemed to have acted incorrectly then the limitation is removed and individual assets can be taken by creditors.

I can see events given the nature of the business where limitation might not apply.

You pay your money and make your choices. I just don't understand why people don't do it for themselves.

JonnyT

 

[Directional]

TCA website states that the company is limited by guarantee.

http://www.hanovercompanyservices.com/prices/limited_by_guarantee.asp

A company limited by guarantee is a not for profit entity and does not have a share capital. It is normally incorporated for people wishing their company to acquire a corporate status but will have non-profit making functions. This type of company may be used for people wishing to gain charitable status, for trusts, clubs, churches, schools, or professional and trade associations ie. a not for profit organisation.

As the limited by guarantee company operates without the aim of making a profit, there are no shares issued. This type of guarantee limited company has members instead of shareholders. Instead of buying shares, anyone who wants to be a member signs a form agreeing to pay a sum of money (for example £1). The members will have limited liability - the member’s liability is limited to the amount each member agrees to contribute to the assets of the company in the event of its being wound up, normally £1. This form is called the ‘guarantee’ and is legally binding.

The members agree to contribute a membership fee or subscription, normally have equal voting rights and elect a board of directors. Any profits are not distributed as dividends, but are put towards the company activities. To form a limited by guarantee company we require one object clause outlining the broad aim of the company, we then incorporate this statement into your Memorandum and Articles.

Unlike unincorporated associations and trusts, the guarantee company has a separate legal existence from its members. This means that, in its own right, it can employ people, own property, enter into contracts and sue or be sued in the courts. The directors, who are also defined in law as charity trustees if it is a charitable company, conduct the daily running of the business. The directors may call themselves a management committee, an executive committee, board of trustees or board of directors.

 

[JonnyT]

No such entity exists in UK Law to the best of my knowledge.

JonnyT

 

[Directional]

google.co.uk for "limited by guarantee uk" - plenty of information out there

 

[JonnyT]

So they do. They are not for profit and no monies can be distributed to Shareholders, directors or members...

Typically used for Charities and Schools...

So how do you get your profits out?

JonnyT