Motives for Wanting so many Companies with Puppet Directors are Obscure.
A preposterous scheme to inundate the United Kingdom with thousands of fake limited companies is currently in the works.
It concerns a business in the United Kingdom that has been offering members of the general public the opportunity to become directors in name only for the price of $75.
Kedros Formations Limited teased their potential customers by saying, “Your only responsibility is to forward on mail to our designated email address.”
Members of the general public from the Philippines, who are paid the equivalent of £160 per year to serve as the new directors, eventually take the place of the nominee directors from the United Kingdom.
The organisation that is recruiting front directors in the Philippines has stated that it wants at least 10,000 of them to work for them. If you accept the offer, one of the terms is that you can only serve as a director for one of the new businesses being created.
If the plan is carried out successfully, the outcome will be the formation of 10,000 limited companies in the United Kingdom, each of which will have a different director and will appear to be independent from one another, but will actually be managed by the same organisation.
Joseph Butterworth, age 21, is the one in charge of running Kedros Formations out of Manchester.
Compass Star Limited is the organisation that is doing the recruiting in the Philippines; however, some of its software is licenced to the UK company Jansen Contracting. Gary Butterworth, age 49, was a director at Jansen Contracting until the month of November last year.
The information provided by Companies House suggests that he currently resides in the Philippines.
Compass Star poses the following question on its Facebook page: “Would you be interested in the chance to be the sole director and shareholder of a limited company in the United Kingdom?
You will be paid for the services that you provide to the company in your roles as director and shareholder, and you will also be expected to represent the company.
It has been made clear to the Filipino recruits, just as it has been to the directors in the UK, that they will not be responsible for running the company. Instead, “a professional management company will deal with the daily operations of the company in the UK.”
It offered a referral payment of £16 for introducing a new recruit as an incentive to help it reach its target of 10,000 directors; however, it is not exactly looking for high-fliers in the business world to join its ranks as directors.
On a website that no longer exists, there was a question that seemed to beg the obvious answer: “Why do we need so many UK companies?” The explanation for this is very elementary. A response that is too nebulous to convey any sense of precision, such as “In the United Kingdom, due to legislation, a small company can trade more cheaply than a big one,” is unacceptable.
According to the terms of a contract that I’ve seen between Compass Star and one nominee director, the company will be operating in the temporary labour market in the UK. This is something that Gary Butterworth is very familiar with.
When he owned two different businesses in the past, both of them participated in a tax-avoidance scheme that resulted in workers being paid less than the minimum wage.
The Gangmasters Licensing Authority decided in 2014 that Apus Contracting and Vela Contracting were not “fit and proper,” and as a result, the authority decided to revoke both of their licences.
According to the statement made by the Authority, Mr. Butterworth “attempted to distance himself from the operations of the companies by restructuring the businesses through a series of companies registered in offshore tax havens.”
Which sounds remarkably similar to the operation that is being carried out right now in every respect except for scale.
Neither Mr. Butterworth the senior nor Mr. Butterworth the junior have responded to my questions regarding the reasons for wanting to establish 10,000 companies.
Or how Kedros Formations can justify the letter that it sent to a nominee director who had second thoughts about this shady business and decided to dissolve her company after receiving the letter, which I have seen.
It cautioned her that she ran the risk of being sued for breach of contract, losing “many thousands of pounds,” and even facing criminal charges as a result of her actions.
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