The Compendium

Holding Out

When a person or organisation ‘holds themselves/itself out’ as being, for example, a director they may appear to ‘in fact’ occupy that position.

De facto directors are directors ‘in fact’. This means that they may not be entered on the ‘register of directors’ at Companies House, but in fact they are still directors, because they are ‘holding themselves out to be’ or allowing themselves to be ‘held out’ in this way.

A person can ‘hold themselves out to the world as being a director by:

• being a signatory on key documents, such as contracts, proposals, cheques, etc.;
• attending board meetings;
• hiring and firing staff;
• attending meetings and appearing to be a person who is a decision maker, or a key member of the management team;
• being a person with access to the company bank account, and making withdrawals and setting up payments.

[See ‘Director’, ‘Register of Companies’ and ‘Companies House’.]

Home Reversion

Home reversion is where an individual homeowner sells part or all of their home to a home reversion provider in return for a lump sum or regular payments.

The homeowner has the right to continue living in the property until they die, but have to agree to maintain and insure it. The homeowner can ring-fence a percentage of their property for later use, possibly for inheritance by only selling part of their property.

The percentage they retain will always remain the same, regardless of the change in property values, unless they decide to take further cash releases. When the last borrower dies or moves into long-term care the property is sold and the sale proceeds are shared according to the remaining proportions of ownership.

[See ‘Equity Release’.]