Drew Belobaba on why you should vote no to UKIP becoming a limited company.

Mr Belobaba is both a UKIP PPC and a qualified solicitor.

For more information see GLW’s blog: http://caterpillarsandbutterflies.blogspot.com/2009/02/272-eukip-changes-solicitors-view.html

Dear everyone,

I received my ballot papers today. Together with the ballot papers for the NEC elections and the constitutional changes I note that members are being balloted as to whether UKIP should be turned into a Company limited by guarantee.

As a solicitor (albeit not one who has practiced company law) I do have an elementary knowledge of Company Law and this proposal gives me great concern, unaccompanied as it is by any detailed information.

For those of you who are not familiar with these sorts of matters, a company limited by guarantee is a type of company in which members of the company, rather than holding shares, give a guarantee of the debts of the company. It is often used by clubs and other non-profit groups that wish to incorporate (most incorporated businesses are companies limited by shares).

I think it would have been very helpful if together with the ballot question, details of the proposed articles of association of the company had been provided, in particular the following information:

1. Who are to be the guarantors of the company? Is it to be the ordinary members of the party?

2. If the ordinary members of the party are to be the guarantors what is the amount of the guarantee to be given by each member?

3. Companies law allows for different classes of members. How many classes of members is it proposed the new company will have and what rights will each proposed class have.

4. As a company limited by guarantee, I presume that it would become easier for UKIP to borrow money as its members would be guaranteeing the debt. What rights will members of the company have to scrutinize and consent to liabilities that the company may incur?

In my opinion, at the very least members require answers to the above questions before they can make an informed decision about the wisdom of incorporating. Many, if not most of our members will not realize that they are potentially voting on something that may cause them to incur financial liabilities. Therefore to put this question before them at best suggests a serious lack of judgement on the part of those proposing it.

I will be voting no to this proposal. If the proposal passes then I feel that Ileana and I will have no choice but to relinquish our memberships in UKIP until any potential liabilitys attaching to membership are made clear to us.

Yours truly,
Drew Belobaba

End of letter.

Another one to add to Nigel's hit list!