Can an adviser be considered a director? My management consultancy business is facing legal proceedings from an investor in a company that I used to advise, which recently declared itself insolvent. The investor is seeking that I be disqualified as a director, claiming that I acted as a director because the company in question heeded my advice. However, I was never formally appointed to a director position, and while I regularly advised on corporate governance, I disagree that I can be held at fault for what happened and be barred from being a director in the future. What would you advise me to do? It's worth noting that when a company goes into insolvency, the practitioner overseeing the insolvency drafts a report to the Insolvency Service. In this report, he outlines whether there was any wrongdoing by the directors of the company, or by anyone who carried out the functions of a director (known as a shadow director). A shadow director is somebody who, although not formally appointed as a director, nonetheless directs or controls the company. Shadow directors can be subject to the same sanctions, including director disqualification proceedings. To assess whether you became a shadow director when advising the company, the following tests will need to be considered. Firstly, did a majority of the company's directors "become accustomed" to seeking your advice, and then act in accordance with your instructions? Secondly, was this regular practice such that you had real influence over the company's activities? If it is concluded that you are a shadow director, then the Insolvency Service will assess the role you played in the events leading up to the company's insolvency. If you do face director disqualification proceedings, you may wish to consider a "carecraft order." This would involve you coming to an out-of-court agreement with the Insolvency Service as to how many years you will be disqualified as a director. The advantages of this are that you will avoid the stress and cost of a full-blown trial, and should be able to negotiate a less severe sanction. Paul Taylor is a partner at Fox Williams, a law firm Logging off from LinkedIn I am the owner of a boutique technology industry recruitment agency. One of my star recruiters has recently left and has some clear covenants in his contract about not contacting clients for 12 months after their departure. I know the person well and think it is unlikely he will approach anyone; however, can I also ask him to delete connections on LinkedIn that he acquired during his time with me? Social media contacts are not covered in our employment contracts. LinkedIn is a notoriously grey area from an employment law perspective. The law is developing rapidly but not as fast as the use of LinkedIn itself. The best form of protection is to have a comprehensive social media policy which deals with the use of LinkedIn, both during employment and after it ends. In the absence of such a policy, you will need to rely on other terms of the employment contract, such as confidentiality provisions and post-termination covenants. At a push, you may be able to argue that the connections made during the employee's employment constitute confidential information which remains the property of the agency and should therefore be deleted. In addition, if the employee keeps the contacts and updates his LinkedIn details, this may constitute a breach of his post-termination restrictions. Having said this, it is important to consider the practicalities of enforcing such legal restrictions. A strongly worded letter to the ex-employee telling him to delete his contacts might work. If it doesn't, you would need to consider taking formal action. Typically, this would involve a claim for breach of contract and/or an application for an injunction to compel the ex-employee to comply with his obligations. Both of these involve significant cost and time and have no guarantee of success, particularly with the lack of precedents in this area. It is important therefore to assess the potential loss to the agency now and tailor your approach accordingly. Victoria FitzGerald is an associate at Faegre Baker Daniels, a law firm Who's next at helm of sailing firm My brother and I run a luxury sailing holiday company and we have recently started talking about succession planning and who will run and own it when we decide to retire. The company is registered in England and this is where our office is, but our main assets, the boats, were purchased and are kept in Europe. Does this present problems? Is there anything in particular we should know? This is a very common situation and one we see all the time. The legal aspects are actually not that complicated because you are handing over a company and not its underlying assets. As this company is registered in England, the law of England and Wales applies. If the boats are owned by you personally, but made available to the company for charter, the transfer of the boats would be relevant and for that we would bring in specialist shipping lawyers. You would have the usual tax considerations - capital gains tax on your shares (and/or the boats), but you may be able to claim entrepreneurs" relief on the shares at least. Much the most interesting and perhaps difficult aspect is choosing your successors. In our work with family businesses, we find this to be the most delicate and potentially contentious issue most of them face. Have you thought about staggering the handover? You don't have to give it all up at once; splitting ownership and management by passing shares to the family, and management to external directors assuming there is no obvious family member to run the company; or remaining involved in a mentoring capacity while new family members learn the ropes? What I can say categorically is first, external objective advice is essential and will prove invaluable and second, the sooner you can start the process the more likely the transition will be smooth - though it is rarely completely plain sailing! Jeremy Curtis is a partner at Pemberton Greenish, a law firm