Opening a business bank account with Alliance & Leicester for a client. The client company had one director and an off the shelf company secretary.

The bank declined to offer a bank account citing its reason as "one or more of the Directors involvement with a liquidated company".

The Director, a millionaire, had closed a company three years earlier and distributed the large surplus the company had amassed as a dividend to himself and the other shareholders.

Naturally an off the shelf company secretary will be involved in liquidated companies as so many new companies fail in their first year.

Although, I did appeal the decision based on the facts and had the account opened it does prompt the question why

1. a bank would apply a screening technique based on involvement with a liquidated company
2. without understanding the nature or scale of the liquidation (was it a corner shop or Enron?).
3. When the Director is clearly not disqualified from acting as a company Director and 
4. even had he been involved in a compulsory liquidation, why, he should be refused a bank account because he was involved in a failed business.
5. If the business only needs a current account with no overdraft or lending facilities where is the risk for the bank?

You would think if someone picked themselves up from business failure to try again they would be encouraged, rather than having institutional doors shut as if they carried a communicable disease. Do the life coaches not continually remind us of Edison and the light bulb?

At least in this case there was a happy ending, Alliance & Leicester saw sense. This is more than can be said for HSBC who once declined to open a business account for me because my personal bank branch was in East London, I lived in Surrey and I hadn't changed the address on my Driving licence. It all added up to suspicion. This is why I always dissuade clients from using HSBC. I will always recommend an alternative bank, like Alliance & Leicester or Barclays.