One of the issues I see regularly is where a company gets itself into difficulty and the directors are responsible. In Australia, a business only really needs one director in control of a company. But quite often, what happens is what actually happened to one of my clients recently. They have a tax debt and have been issued with directorss penalty notices. At the time, it was a father and son, and the father put some money into the son’s business, but he also wanted to be a director to have some control. Consequently they are both responsible for the debt.
The son doesn’t have any assets and the father has a house and is close to retirement. Now all of a sudden the father is responsible for the debt.
The notion that we need more than one director in a company leaves everyone vulnerable. So when forming a company, look very seriously at whether you want one director or two directors. If an investor feels the need for your company to have two directors, then perhaps that is not the person you should be going into business with.