Cash and co

A client close company has substantial cash balances earning interest now at a derisory rate. Individual savings seem to attract a higher interest rate than corporate deposits.

The managing director (MD) and controlling shareholder has suggested that an account be opened in his name as undisclosed agent for the company.

The intention would be that he declares himself bare trustee for the company and a suitable document evidencing this be drawn up and signed and sealed on behalf of him and the company so that there is no doubt about the arrangement.

The company would then pay money under such an arrangement to the MD which he would immediately deposit in a separate account.

All the interest would accrue to the company and there would be no intermingling of personal and company funds; the balance in the account would belong wholly to the company. Interest credited would be included...