What to do if company trying to strike own company off - but owe us money and have CCJ

What to do if company trying to strike own...

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Hello, I am not sure if anyone can assist but here goes....

History:

We are a small family business (3 of us) and are owed money - over £10k from a customer. We took the company to court and one of its directors as they offered a verbal personal guarantee. We won the case against the company and now have a CCJ against it, but not against the director as we had no written proof!

The company was a gym and we hired them equipment over a year, but they started paying late and then shut the gym, made staff redundant etc. We have received no money from the company following the CCJ.

The director told us the limited company ceased to trade before Christmas after the court action had begun in June, and July time they applied for voluntary winding up. On companies house it says proposal to strike of. I have spoke with them and they advise they received the form DS01 from the company on 17th march.

We objected their application and had to show proof on our court action etc. We also complained to CH because of the directors behaviour, not telling us of theirintention/application to have the comapny struck off etc which by law I understand they were meant to do.

The situation we are now in - is we have no idea what to do next. It has been a few months and we have not asked for bailiffs to go to the company because we know the business is locked up ( we looked last time nearby). That was their registered office/trading address. We have no idea if the business has any funds, assets etc.

CH have now contacted us to advise they will not be taking any further action against the Director for failing to advise us of thier aplication (which they still have not done to date) and unless we

"If you wish to maintain your objection, you will need to provide current documentary evidence of any action that is being taken to recover the outstanding debt. On receipt of this information, I will consider whether your objection can be maintained.

If no reply is received within 14 days of the date of this letter, dissolution action will resume."

I don't understand - how can a company close itself basically, whilst still owing CCJS to creditors?

We don't know what the next step for us is - we don't want to waste any more money on this but its the principal. The guy is a crook! I know that his own nephew who worked for them contacted us asking us what we were doing, because the staff have not been paid thier redundancy from the company, and he knows his uncle is doing it this way in order to avoid paying it.

Is there a way the goverment or someone will appoint liquidators or the such? Do we need to do this to stop him simply striking it off himself? How costly is this?

Oh dear I am at a loss.

Any advice would be much appreciated!

Claire

 

Replies (47)

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By zebaa
19th Oct 2011 13:08

You are stuffed

It seems to me you have no chance of getting any money. Your only chance was via the director, which in your post you said were unable to prove and so lost that part of the case. Do not spend any more time or money chasing rainbows. Depending on what vat scheme you use you may get back any vat you have paid and you can offset the loss against your profit this year. That's as good as it gets.

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By The Black Knight
19th Oct 2011 14:06

winding up

You could present a winding up order and ask for a formal winding up, but if there are no funds to pay you and you cannot then prove Wrongful or fraudulent trading (which may be expensive in legal fees itself >£10K) you have little hope of collecting your money.

Try phoning The Insolvency Service and ask them for a way forward.. particulary if you think this has been done deliberately.

I believe,You can also object to a striking off if a criminal offence has been commited, but the likelyhood of anyone taking any action or even being concerned is remote.

On balance I would have to agree with the previous poster that you are a bit "stuffed"

Unfortunately the current system and companies house encourage this sort of behaviour.

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By The Black Knight
19th Oct 2011 14:40

Companies Act 2006 section 1006

The failure to provide you with a copy of the application to strike off is a criminal offence.s.1006(4)

If it was done with the intention of concealing the striking off from you then that is an aggravated offence s1006(5)

I would carry on kicking up a fuss at companies house, write to your MP too.

Nothing is done about this because not enough people make a fuss, and when accountants do we are treated as if we have some self interest in the matter and are largely ignored.

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Teignmouth
By Paul Scholes
19th Oct 2011 14:43

Other creditors

If you can find out details of other creditors you could agree to share the cost of putting the company into liquidation however, as stated above, the object is not to get money from the company but from those who have (presumably) got away with the assets. 

The investigation into the affairs of the company and where its assets went is the job of the liquidator and so it's important you get some evidence that things were not handled properly, in particular that other creditors (usually the owner/managers and relatives) were paid out in preference to others, when the company was on its way out.

Not easy but, again, you quite often find that a bunch of creditors can share information as well as costs.

Good Luck

 

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By cb30
19th Oct 2011 15:11

Thank you

I will see if I can do a search and find out if there are any other CCJ against them now. I am not sure how else I will find out if there are other creditors though as not sure who else we can contact to find out.

 

We quoted the s1006(5) etc in our complaint to CH and they just don't seem interested. They said that they asked the director if he sent the form and he showed them a receipt where he sent us something (which he claims is the notice of their application) which was sent by recorded delivery., This was not the case, the item he sent us was a dated witness statement for the court case, which we advised CH was the case. We even send copies of a letter we sent to the court in direct response to what was in the envelope - ie his witness statement being some 14 days late than it was meant to be.  But still CH have come back to say they do not propose to take any further action due to the code......

 

I will try caling the IS and see if they can offer any assistance - thank you

It is so annoying because you just know that these directors know they can do what they want and get away with it - this director in particular has had comapanies before and closed them, and no doubt done the same to other people. And when you complain about their actions being against law - to CH etc - they just don't care. They let these people play the system and fail to help companies like ours who play by the book.

Thanks so far guys - Claire

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By The Black Knight
19th Oct 2011 15:23

history of insolvency

Bring this to the IS's attention too , with list of companies, dates etc.

Has he been disqualified before ?

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By Mouse007
19th Oct 2011 15:44

Fraud is a Police matter

I assume that you just want your money and that you have already recovered your equipment.

Unfortunately it is not going to be easy to collect on the CCJ. Any thing you try and do now will cost and the gamble is you will loose even more. You should therefore assess the risks of further action very carefully

You mention in your previous post that the director has a string of previously dissolved companies. Were any of these actually subject to formal liquidations and if so did they have names similar to (or include words similar to) the name of the company you have a judgement against?  If so you may be able to go directly after the director but only consider doing so if you can establish that he has sufficient personal assets. If he has no assets don’t waste your time.

The are two other issues to consider, wrongful and fraudulent trading. Establishing either will be difficult and could be expensive, unless you can get the police interested in the latter (possible but unlikely unless your evidence is very strong).

It is always possible that the company does have a hidden asset in a substantial overdrawn director loan account. By having the company struck off this fact may never come to light. HMRC might however be interested in the matter, especially as there are several other dissolved companies. HMRC could petition for a winding up and force matters into the hands of the Official Receiver to investigate. But again there would be no guarantee of success for you.

So how about a last throw of the dice, a bluff perhaps, the point is to see what reaction you get.

Advise the director that unless he settles you will report him to the Police and The Special Compliance Office of HMRC for fraudulent trading.
 

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By cb30
19th Oct 2011 15:52

Hi Black Knight

 

Thank you - I'm not sure - Just did a quick search on coapnies house and can't see him in the list.

 

CH says that no accounts have been filed, return late etc. Basically the company they first asked us to invoice in Sept 2009 - was being closed down - he said due to HMRC in May /JUne 2010 - and asked us to start invoicing the new company - which we did and for around 5 months all as in order. then they just kept paying late and a few months later wham.

 

The initial company says it is currently in liquidation - so wonder who did that - was it HMRc ?? I don't know. Whereas the new one which has not filed any accounts etc, he has applied to have struck off.

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By Mouse007
19th Oct 2011 15:59

"The initial company says it is currently in liquidation"

That is good news, are the names similar in any way? for example do they both include the word "gym" by any chance?

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By The Black Knight
19th Oct 2011 16:01

order docs

Order the liquidation documents filed at companies house for £1 these should tell you, go to order information ... this will give you a list of documents you can get a copy of.

Type in directors name in google and see which companies appear, also try a google search on the registered address, and previous directors address if you can see them thesedays.

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By cb30
19th Oct 2011 16:24

Nope seperate names unfortunately :(

Only commonality is trading address and directors.

I will do all of the above - thanks guys!

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By Mouse007
19th Oct 2011 16:28

What about trading name?

Was it ABC Ltd T/A gym and now XYZ Ltd T/A gym?

What sign was (and still is?) above the door?

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By cb30
19th Oct 2011 16:51

I wish - I'm trying to be careful and not used names etc

But it was like "Claire Limited" and then became "John Limited"

The name above the business was another of the companies - say "Skinny4less" which we never traded with but I guess was a trade type name, or I know is linked to one of the other directors - (there were 2 directors, one we were not heavily involved with but he had another fitness business which had the same name as this "skinny4less") Which I am not sure, but think is still trading. But it is not at the same site, or linked any other way to the company we have the ccj against.

 

 

 

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By Mouse007
19th Oct 2011 17:15

OK

It appears to me that you are dealing with the same buinsess.

The company behind the business changed - due to a liquidation, but it was the same business. Can you establish that it was holding itself out to be the same business?

Does this business advertise? check yellow pages, the internet etc. to see if the same name was being used before and after. What do the general public think the business is called, what is it known as? Did the telephone number change? etc

My local is "The Rising Sun", it is now being run by the third limited company in the last 10 years. The pub sign remains unchanged however. The trading name is relevant when you have common directors.

Was the "skinny4less" plain "skinny4less" or "skinny4less Ltd/Limited"?

You need to establish if there was a trading name by which the liquidating company was known and if that trading name is being used by the new company. I do not think it matters if you were unaware of the trading name so long as you can prove both companies were known by the same business (trading) name.

I doubt very much that many of the regulars in my local know the name of the limited company.

 

 

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By petersaxton
19th Oct 2011 19:08

Sorry but

You need to deal with the Police and Companies House. Unfortunately, the Police and Companies House are two of the three most lazy and incompetent organisations in the UK.

You need to get your MP involved and forget about getting any money. These organisations just take as much money as possible for doing as little work as possible.

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By Mouse007
20th Oct 2011 00:24

Disagree

HMRC can clearly claim the top four spots by a mile ~ (or two thousand).

Dealing with HMRC is as joined up as the UK is when it comes to sport. They too have four nations: VAT, PAYE, Contributions (National Insurance) and Income/Corporation Tax. They all hate each other, never share any information and always support anyone but VAT.

Companies House comes a distant 5th. Bit like a lost wannabe colony - it sort of toes the line but does not understand exactly why or what it is doing. Hence the gay abandon when it comes to striking off companies allowing serial fraudsters off the hook.

The Police on the other hand are rather good - at least they leave us alone. Indeed I would nudge an Institute or two above them for being lazy and incompetent organisations.

Meanwhile returning to subject - Claire, if you can, you need to nail the director personally. This may be possible under the Insolvency Act 1986 if you can show they are trading under the same name as before. This is not restricted to company name, it includes any “known as” name. Put it another way, what is the "pub" called?

 

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By Dusty
20th Oct 2011 02:32

Same situation (ish)

I'm really intrigued by this thread. Similar situation: CCJ in my favour against company A. Sole Director put Company A into voluntary dissolution (stayed by myself) and now trades from same premises as Company B. (He already owned Company B but wasn't using it)

Like Claire I'm appalled that Companies House are not in the least bit interested that he has lied on the DSO1. I got exactly the same response.

On the same name subject I am intrigued. It's a web design company and the director does all the work so every site he builds says "built by director" Can this be interpreted as a 'known as' name bearing in mind his claim that company A was not insolvent? (and it may be possible that he's paying himself as an employee of the company)

I'd also add that his website portfolio lists all the clients of company A as company B clients and clients paying him annual service charges have merely been asked to make their payments to the new company.

 My plan was to get his accounts examined before trying to enforce the CCJ but like Claire I'm a bit lost. Seems to me the law is there but there's no one willing to do anything about those who disregard it. 

I tried for personal liability in small claims on the grounds that all communication came from the director personally. (None of the communications had the company name) but the judge just shrugged and said the contract was with the company.

Any advice definately appreciated...

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By petersaxton
20th Oct 2011 06:09

Official Receivers should also be on the list of incompetents and "couldn't care less".

I had a client who the initial contact was along the lines of "our bookkeeper has left and we need a VAT return done quiickly". When I turned up it seemed that very little had been done properly. There was no way a VAT return could be done without all the entries being done. When I told them they asked me to do that first. So from a simple VAT return it turned out that they were demanding two days work a week from me and acting like I was unreasonable if I didn't spend the time on it. One of the big problems was that if you spent one minute not making entries on Sage you got locked out and had to be logged back into the system again. This suddenly was low down on their priority! Eventually they agreed to get somebody in. They wanted me to get this person up to speed so I spent one day going through everything with her.   After spending ten minutes waiting for them to get around to logging her in every 12 minutes she realised they were idiots and never came back the next day.

Any, the company went bust but the Official Receiver didn't seem to care. The "director" (he was company secretary and his wife was the "director") simply ignored the officials. He took all the computers - literally 100s of them claiming they were his own. He didn't provide them with the accounting records. The Official Receiver asked the court bailiffs to arrest the director. The Official Receiver said the bailiffs couldn't find the director although they had his address. I served a court document saying that the director had to attend a public examination. The wife - who should have attended - didn't appear and the "director" tried to make out the documents hadn't been served but was soon caught out with several lies.

I asked the Official Receiver what the bailiffs had done to find the director. After the Official Receiver told me that the bailiffs had attended the director's premises on several occassions I asked them for details of locations, dates and times they eventually admitted that the bailiffs had not made any attempts and had returned the warrant without any attempts.

I found out the directors new work place but the Official Receiver didn't want to make any effort and had been very unwilling to give me any information.

I am now in the position where I think there is a valid claim for incompetence by the Official receiver.

 

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By The Black Knight
20th Oct 2011 09:56

drives you mad

The level of incompetence is astounding in all areas of public service.... I would sack them all..and am quite fed up hearing them bleating about their pensions... If they got off their backsides and did some work we would perhaps be able to afford them and their over generous pensions.

You need to complain about companies house, this is often the only way you will get a response from a government department,.. those of us that deal with HMRC are used to this.. and mere mortals would not believe the trouble we have over simple matters.

The not having a company name on the directors company email and correspondence is a criminal offence £1000 fine and a trading standards issue...... get on to them and kick up a fuss.

Unfortunately many accept that there is nothing you can do and the government are more likely to take notice of a facebook group than a properly reasoned approach........May be someone should try that. I think you can even do a petition on facebook now.

 

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By cb30
20th Oct 2011 10:19

Dusty - yeah similar response from the judge to our claim when tried to go after director personally. Even though we had two witnesses myself and other director of our company who had the conversaton with the dodgy director of this other company, because I had not sent an email or anything written afterwards they said it was not valid. So verbal guarantees are pointless really to us now.

 

Mouse - my only thought with trying to go for the other running company - is that they do not trade from the same site. ie the registered address of the company A who we originally dealt with was also the trading address - ie the gym. Then they were put into liquidation (application for complulsory liq) so we began invoicing company B (who we took to court and have the ccj against but who ceased to trade), who ran from the same premises. The judge did make some comment about we maybe being able to go after company A - but it curretly states in liqudaton on companies house, and our view was there would be no money that way either.   This other company (skinny4less) is run at completely different premises. There were two directors of company B - one of them is the director of skinny4less. They have 2 or 3 locations in the UK. I can only assume that prior to our involvement with this customer, the gym in question was owned by this skinny4less or another of their variations. When I look at the firms now, the list goes on - I can see at least 4 or 5 differnet names of gyms which this director has been a director of in the came town (it doesn't show me the address now) which have all been put into compulsory liqudation or are dissolved.

When dealing with these people they emailed us from various of the above corporate email accouns, including ones which still have live websites but it does not tell you who owns the website on them so can't see the limited company behind them - its a mess!

 

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By The Black Knight
20th Oct 2011 10:49

serial offenders

Give the list of companies and directors with your supporting evidence of dates etc etc full history of the facts to the IS asking them to look into the question of fraudulent trading and consider the disqualification of the director....also copy in your MP and companies house.......Rogue traders may even be interested. Copy them in too.

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By Dusty
20th Oct 2011 12:53

Re: who owns websites?

First on your own computer go to:

START then RUN. Type in cmd. On black screen type in ping then space then web addresses (without the www)

This will give you server ip address. If all the same, it's a good start even if domains are registered in different names or to the host.

Next look for whois in google. You may get re-directed to another registrar but should be able to find out who owns the domain names.

Unfortunately, the judge I had would not have understood the implication of a common ip address (or even the term)

 

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By cb30
20th Oct 2011 12:58

Is a no go

Contacted the IS - helpline - they say we have to report it online - which I have done already but never heard anything back from them.

They say they wouldn't tell us anyway. We asked about informing the police and they basically said no point - typical.

They wouldn't star liquidation or similar against the company, a creditor would have to and at about £1400 there is no point in us doing this, as the company has never filed any accounts so we don't even have anything to go off to see what funds assets the company has.

I can only think the only reason to do so is as you say to see if the directors have took funds out etc before paying creditors. We just don't have any more money to throw at this - and another £1400 seems mad. When we know the reason the director is going down the striking of route is to save money - the previously employed manager contacted us to tell us so, as they were not being paid redundancy, holiay pay etc (the staff) and the director had decided to go with this option to save money, meaning they won't get a penny either. He is related to the director and I doubt will give us any more information. We asked someone to check about any other ccj but they cannot even see ours for some reason so unable to find out if other creditors that way. We used to have a credit check system but not now so can't check ourselves.

 

As I am sure it was HMRC who did the com liq against the previous company a, if we contacted them is there a way of finding out if they are a creditor of company b - or I'm guessing they wouldn't tell us?  I wish we could just create a facebook group and name and shame but it would be us who would get in trouble I'm sure. Like my Dad said - for 40 years plus he has don everything by the book, ensured returns on time etc. And then you have these people who do anything and can get away with it. The only way they can get investigated is if people spend the money to get it investigated.

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By Dusty
20th Oct 2011 13:16

Trading name?

Having done a bit more research since my original query.....I think the question I'm asking is this.

Director is trading in his own name now with new company. When I dealt with him he was trading in his own name from a different company.

Can I go after my money from the new company? ...or at least request both company accounts are examined in an order to obtain information. I'm thinking he won't have paid fair value for the assets and that the value of the assets exceeds my CCJ. He has between 50 and 150 accounts paying him a service charge of IRO £60.00p.a. that he has just transferred into Newco name.

...or should I just go for enforcement? After all he's trading under same trading name from same address and the one thing that will make him pay up is the threat of the bailiffs taking his property. (or can he just say this belongs to Newco and send them away?)

@black knight. Thanks! Hadn't considered Trading Standards. I thought the judge would know it was an offence but he didn't seem to.

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By Dusty
20th Oct 2011 13:32

For Claire Re CCJ not showing

A CCJ will only show up when you start enforcement proceedings which I don't think you've done.

...and you're right HMRC can't give you any info but try talking to someone at Companies House. They told me it was Inland Revenue that had the company re-instated the first time he went for a voluntary liquidation.

 You could do what I'm doing. Go for an order to obtain info. For £55 you could at least put him in an uncomfortable position having to explain his accounts and get a better idea of what's going on.

 Initially though...I'd write to him and tell him that's what you're going to do if money not recieved by set date (or a reasonable plan to repay you - suggest a CVL) This letter should give you the grounds to have the co resurrected as it's proof you are taking action.

 If the accounts are not in order then you may find he pays up.

 

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By petersaxton
20th Oct 2011 14:05

Confused

"Director is trading in his own name now with new company. When I dealt with him he was trading in his own name from a different company."

What does trading in his own name mean? Why are you mentioning two different "company" 's?

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By The Black Knight
20th Oct 2011 14:08

cos house web check

www.companieshouse.gov.uk

go to web check

pick company

order information on this company

 

will give you a list of documents you can order for £1 the liquidation documents with who did what and list of creditors should be there.

The only way you can pursue the directors or the next company is if you can show they have done something wrong: Wrongful trading - carrying on trading when they knew they were insolvent and should have shut down, Fraudulent trading - they intentionally traded with a view to defrauding creditors etc or Phoenixing which is supposed to be illegal which is what I think mouse was looking for.

if you can establish that certain creditors have been preferred over others e.g the accountancy fees, directors loan accounts, unlawful dividends etc then a liquidation would recover these from the preferred creditors and redistribute these fairly (or at least in accordance with the insolvency act)

the pursuit of the directors regarding disqualification/criminal sanctions is for the state to consider, but you can complain so hard they might listen and take action, but this would not get your money back, but may make it more difficult for the directors to do it again...the number of times the directors have done this will have a large bearing on this.

I hope that makes things clearer.

 

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By Mouse007
20th Oct 2011 14:31

I'm Confused too

I think both Claire and Dusty actually need to focus on prohibited names (section 216 of The Insolvency Act 1986) and target the director personally - all other avenues appear to be expensive dead ends to me.

 

some cut and paste on the subject

"A prohibited name is a name by which the liquidated company was known at any time in the 12 months immediately before the liquidation: whether this is its registered name at Companies House, or its trading name, or any name so similar to its registered or trading name as to suggest an association with the liquidated company.

The restriction applies to a person who was registered as a director or acted as a director of the company in liquidation at any time during the 12 months immediately before the liquidation.

For 5 years from the date of liquidation, you are not permitted to be a director of or take part in the promotion, formation or management of a limited company that is using a prohibited name.
 

If you contravene section 216 of the Act, you are committing a criminal offence. You may be prosecuted by the Department Business, Enterprise & Regulatory Reform and could go to prison if you are convicted. In addition, under section 217 of the Act you could be made personally liable for the debts incurred during the time that you were involved in managing a business using a prohibited name, even if it was a limited company. This could happen whether you are prosecuted under section 216 or not.”

 

The bottom line is you can go directly for the director in court proceedings using Section 217. You do not need to worry about the company being struck off, the offending director has personal liability for all the debts of the company.

 

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By The Black Knight
20th Oct 2011 16:58

Follow the Mouse for your money

fair play ! 007............Nice one

bet there's thousands in default of that one.

would still bring serial nature of offences to authorities attention in hope that it prevents or restricts them happening again.

 

 

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By cb30
20th Oct 2011 17:12

Mouse - I need another coffee!

Can this help me then? If the director was director and secretary of "Claire Limited" trading at no 2 wishiwas drive, company forced into compulsory liqudation. Then forms and becomes director and secretary of "John Limited" trading at no 2 wishiwas drive - their names are not similar - in which way can I get them on them being a director of a prohib name?

 

Confused.com today - sorry!

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
20th Oct 2011 17:26

It's more like
Its more like running Claire Ltd t/a John, then liquidating Claire Ltd and opening John Ltd t/a John, or Bob Ltd t/a John or Bob Ltd t/a Claire.. Both Claire and John are prohibited names under Claire Ltd's liquidation.

If Claire Ltd traded as Claire and John Ltd traded as John, or if Claire Ltd traded as Bob and John Ltd traded as Kevin, there are no prohibited names in use.

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By Mouse007
20th Oct 2011 17:36

Trading name

Was the business at 2 wishiwas drive called skinny4less when Claire Limited was trading and then still called skinny4less when John Limited was trading?

I'm still confused about the status of skinny4less however - is this another (registered) company or just a (unregistered) trading name?

Do not confuse the word "company" with "business". The "company" is the owner of the "business". The Company and the Business may or may not have the same name. They are totally different things and this distiction matters.

If the two Registered Companies (Claire and then John) BOTH ran the business known as skinny4less, then you may have claim against the director personally. Section 217 says so in very clear words.

see

http://www.legislation.gov.uk/ukpga/1986/45/section/216

and

http://www.legislation.gov.uk/ukpga/1986/45/section/217

Preparing, submitting and winning your case is another matter. And as I said above, be sure the director has sufficient assets to pay up. Assess the risks first.

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By petersaxton
20th Oct 2011 17:56

I give up

It doesn't make sense to me and without answers to questions I can't help.

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Replying to Flying Scotsman:
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By Dusty
21st Oct 2011 14:02

Please don't give up. I only got notified of response at 6.19am .

The reason I referred to the two companies: Both are identical in all but the owning Company. Trading as (directors name) He put Oldco into voluntary dissolution as soon as court case went against him and carried on trading using another co he owned already.

The question: Can I go after Newco as it has the trading name and all the assets from Oldco or... more importantly go after the assets.

In which case can I ask to have both company accounts examined to find out if Newco paid anything to Oldco for the assets. My assumption being that if Newco didn't pay fair value then it owes Oldco and then Oldco is still solvent and can pay me.

I accept that he may not have the funds in Newco. It wouldn't be tragic if he's forced to close both companies but I bet he just opens up a third.

Mouse: Don't think I can use S217 as Oldco not liquidated just dissolved and Co Hse not in the least bit interested in fact that the presence of the unpaid CCJ is proof Co was not solvent. (I also sent them proof he was trading 3 weeks before)

 

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Replying to Paul Oxley:
By Mouse007
21st Oct 2011 17:21

Must be insolvent liquidation

Dusty wrote:

Mouse: Don't think I can use S217 as Oldco not liquidated just dissolved ...

Correct unfortunately, that is why I said the liquidation in Claire's case was good news. There must be an insolvent liquidation for S216 to kick in which opens the door to S217. This route is not available to you.

 

Options are very limited and risky once a company has been dissolved. You appear to have already lost the personal liability claim.

Dusty wrote:

I tried for personal liability in small claims on the grounds that all communication came from the director personally. (None of the communications had the company name) but the judge just shrugged and said the contract was with the company.

 

That leaves you with only one option. You have been defrauded and want action. Report the matter to the police (I have been the victim of Fraud) and complain if they do nothing.

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By Dusty
22nd Oct 2011 01:46

In agreement and Thank You!

 I agree and this is to Claire as well when I say that the hardest part of this for any victim is coming to terms with watching someone who either knows the loop holes or is being advised of them stealing your money and getting away with it.

I'm sure neither of us would feel the same way if the directors were behaving in a mature fashion and had done everything they could to minimise our loss.

 In many ways the adviser who says 'walk away' is giving you good advice but there's no closure.

For me, whatever the outcome of the request for information, I know he'll probably spend a couple of weeks juggling his accounts and they won't be in order so he'll be worried.

£55 well spent. He may just think twice before doing it again.

For Claire, I'd advise going public with the director's name. See if you can get your local rag to run a story. Someone may be able to supply the name of a site I once saw where people were exposing companies who owed them and the directors could pay up and have the article removed.

Better still search up any review sites he may be on or add a review to any FindaGym style websites and write an honest review of what happened when you dealt with him.

If you can spare £100 send in the bailiffs. Probably won't get anything out of him but the CCJ will go up against his name to warn others.

Not only will it give you some satisfaction but you might prevent a re-occurrence and somewhere down the line, this kind of self-initiated justice may just provoke enough reaction to get up the noses of those who should be policing director misconduct and force them to deal with the law breakers. 

 If the story is true, there's nothing wrong with telling it.

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By cb30
08th Nov 2011 15:05

hmmmmm

Thanks everyone.

Mouse and Monsoon I think I have got my head around this.

 

So company a ltd contacted us for hire, we did - and invoiced them. At that time he name above the door for the public to see was skinny4less. Inland rev or someone decided to liquidate company a ltd for not paying, so we began invoicing comapny b ltd - but the name above the door remained as skinny4less. As far as I am aware at all times whilst we dealt with these companies. PS not sure how we would prove this though.

 

So would the s217 apply - because he was a director of both company a ltd and company b ltd, and the name above the door (although we never invoiced that name) was the same throughout?

 

Found an interesting article here - which is similar to our situation.........................

http://www.cambridge-news.co.uk/Home/Gym-club-closes-without-warning.htm 

 

But in our instance....... if a franchise was involved this is the first we would know about it.. Interesting to me is we received emails using the corporate email address of skinny4less until around july 2010 time. Then we kept getting emails from the personal account of the gym manager. So in time we were rading with company b ltd, we received emails from gymmanager@skinny4less email account lets say, even though skinny4less were never invoiced. I am not sure how things would sit to do with franchises in this type of situation, because of how they sit legally etc.

Would it be worthwhile paying the £55 and asking for order to obtain more info from the director (who was director of company a ltd and company b ltd) to see how linked and when with skinny4less??  Skinny4less the limited company seems to be trading still, but not sure how this would effect us since we had not dealings direct with them, and invoices were always to company b ltd. Its just that it had the name above the door as skinny4less, and we received some emaisl using the email address.

 

hmmmm

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By petersaxton
03rd Nov 2011 15:20

Entertainment

I've requested a public examination and it's interesting how the court officials act respectful until it is obvious the director is lying. I don't think you'll get any money out of it but it's entertaining.

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By investigator1
04th Nov 2011 12:55

Phoenixing

I currently find myself in a situation that has led me to investigate a father and son outfit that has been involved in "phoenixing" companies for some years. The Insolvency Office and HMRC VAT are investigating but nothing has yet transpired (although they are not permitted say what may be happening in the background). I am trying certain things that may be of interest to other members and would be very grateful for any ideas too. I think the historical evidence in this case speaks for itself but I would be very interested to know whether other members consider this particular case to be extreme or usual.

The business is a bar and has been in operation in the same building and has remained consistently under the same trading name for six years. Within that time I have evidence of five separate limited companies used to run the business one after another although there may have been more. These limited companies have had either the father or son as the shareholder and/or Director depending on which one was personally bankrupt at the time. In the same six year period the son has been disqualified as a Director for his business activities and then separately later made bankrupt for personal debt. In between these times the father was bankrupt. The reason for the son's disqualification was because his previous bar operation just around the corner from the present one, which was liquidated eight years ago owing VAT, NI and suppliers a six figure sum. During the son's disqualification period and later bankruptcy he openly continued to run the businesses without telling anyone that he was not legally allowed to do so. I have evidence of this involvement, which is an offence. The Insolvency Office is aware of this evidence.

Companies House data shows clear timelines of company activities and shows other companies that have existed in connection with further bar operations within the city. This data shows that none of the trading companies have ever filed annual returns or accounts and that they are all repeatedly allowed to be dissolved by Companies House as the traders once more begin to operate under the subsequent company. I have evidence showing that they have consistently failed to pay their utility bills for each company and have even previously contacted at least one such utility company stating that they are new to the building and that they do not know who were the previous tenants (transcript apparently held by utility company). They owe large amounts of money to creditors who I have spoken to (5 and 6 figure sums) but such people feel that they must either resign themselves to the loss of money of continue to support the trading operation in the hope of someday getting a return although future promises to pay have not been kept.

I have reason to believe that they may not have paid any VAT or substantially underpaid VAT during the last few years as I have obtained various accounts records that do not add up. HMRC are aware of this.

One suggestion I can make to those who wish to find out more information and perhaps force a reaction from a government department is to make Freedom Of Information (FOI) requests. These can be denied by the authority if it is felt that it may detrimentally affect the relevant business but if the business is dissolved, then this argument does not stand up as the company is effectively dead in the eyes of the law and therefore cannot be negatively affected. Therefore, if you wish to dig up old company data (not personal), make an FOI request on the grounds that it is in the public's interest to know whether or not the government department is correctly overseeing the legality of a company or collecting its tax properly - do not make it too personal. I have just made such an FOI request to the HMRC VAT requesting all VAT info for the string of dissolved companies that may not have paid VAT and are clearly "phoenix" companies. I will let you know how I get on.

From what I have read on this forum, I now believe those responsible are guilty of fraud and I am now considering, as suggested, contacting the police and my local MP. I also believe a dedicated website of "phoenix" companies and Director prior records is much needed. If we can rate hotels, we should be able to rate fraudsters!

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By Dusty
04th Nov 2011 20:08

Suggestion....

While you're doing that...What about an FOI request to Companies House.

Their figures show a huge increase in dissolved companies and in their own words a 'surprising' increase in the number of new registrations.

The figure that might really make people sit up and take notice is how many of the new registrations are from directors of recently dissolved companies.

England and Wales:

2442,000 companies on register at start of 2010-11376,000 incorporations325,000 dissolutions4,600 restored to register (presumably the majority by creditors)

On a completely separate note, while looking for this information I discovered that ..

Companies House must not dissolve any company on the Register of Companies that has an account with a United Kingdom financial institution. 

I guess this might give some fraud victims grounds for requesting restoration. 

 

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By investigator1
05th Nov 2011 07:39

Claire

Begin thinking outside the box. Most government departments need to be led by the hand by people like you and me. Start doing searches on the internet for his name or any relevant biz or related names to the case. Start a folder containing Companies House documents you have bought (£1 each) relating to the gym. Print them out, scour the details and info they contain and do further searches for this data. I now have about 150 documents saved concerning just two people. You never know what you will find and where it will lead you. Concentrate less on the £10K and more on doing the right thing. If doing the right thing leads you to a repayment then all well and good but trust me that by forwarding data to HMRC, Insolvency Office, Police, your MP, suppliers etc you will be doing good for society and this will make you sleep well at night. If someone had chased the man down a few years ago he would not have done it to you. This is the way good business people must begin to think and this is the way a good society works. Those who "phoenix" companies does so for self-interest. If you are only chasing this man down to retrieve your own investment and profit then you are doing so purely for self-interest. If you attach to your mission the will to bring this person to justice, not for revenge, but for the good of society, it is that which makes you a better person than him. It is amazing how many people I have spoken to who do not want to be involved in what I am doing because they say it is not their problem even though they have evidence to help stop their business activities. If you want the best chance of getting a result, you must accept that result may be a feeling of pride in what you have done rather than the £10,000. The best way to bounce back is by altering your thoughts from revenge to social responsibility and from retrieval of the money you're owed to stopping the person from trading in the future.

Learn as much as possible about the person so that you get under their business skin. I think you may be surprised about what you uncover that may have nothing to do with your current situation but may end up bringing the individual to justice. Corrupt and self-interested people remain so in every aspect of their life. What is the name of his accountant, what is his registered address, business partners? What other companies do they own and have they owned? What is their CCJ history? Did they pay their VAT, NI etc for the business? Is he setting up another business now and if so do his suppliers know what happened to you? So long as you only tell the truth and have a socially responsible reason for acting, informing other business people of your circumstances, it is ligitimate. The most someone can legally do to try to stop you is to get a restraining order or sue you for slander or libel. However, if you are telling the truth and can prove this there is no reason why you shouldn't warn any current partners or suppliers about this person. Corrupt people do not want their business activities displayed in court anyway so it's a pretty safe line of action. If you are only after the money, then you are playing by the rules of commerce and they do not favour fairness - capitalism is designed to favour unscrupulous people I'm afraid. Just look at the banking system.

Put together a file of evidence that you can forward to those who may find interest in it. As the file grows more people and government departments may find interest. If you have documentation or anything on paper regarding the crooked or illegal business activities of this person, keep some copies in your bag so that you can give them to people if it comes up in conversation. Rumour is one thing but evidence is another. If this man has ever been declared bankrupt it is illegal for him to manage a business while he is undischarged from his bankruptcy (usually a year but can be longer). Check out www.london-gazette.co.uk for historical records of bankruptcies and check out the Directors Disqualification register on the Companies House website. Remember, information is power.

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By Dusty
05th Nov 2011 20:54

@investigator1

This isn't just good advice, it's the morality in the subtext that makes this the stand out response.

In a parallel thread on this site an accountant states "only a fool would admit liability". What got to me was no one besides myself raised any criticism.

I've been hesitating about the expense of further action but you're right. Bottom line is not about the money. It's about taking a stand. Making life difficult for those who harm others for personal gain.

£55 for an information request. £100 for a bailiff. Enforcement will ensure the CCJ is recorded publicly. Feel good about it. There's every chance you're stopping some other innocent from ending up on this forum with the same question.

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By The Black Knight
07th Nov 2011 10:15

"only a fool would admit liability".

@ Dusty....... you have to understand some comments in accountancy terms rather than lay person..... this is supposed to be a site for accountants not a general free advice site for non accountants.

That is correct if you are an accountant living in our world, in fact you may find that your insurance is invalidated if you do admit liablilty (as that is for the insurance company to decide).

@ investigator..... go for it nothing will change if no one makes a fuss.....however our experience is that the government departments that ought to police such matters are effectively useless and nearly all their enquiries result in no action apathy.

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By investigator1
07th Nov 2011 10:48

Well said Dusty.

Morality is a far better driving force than self-interest. There will always be those on this thread and any other forum or media channel who do not respond to the moral message because they have been conditioned for so long to fight only for their own prosperity but there will also always be those who do respond and it is those people who advance our society and help others in the future not to face the problems we face today. Forums exist to enhance the cooperative nature of people and it is exactly this cooperation that powers any movement for change. By seeking justice because it is the morally and socially right thing to do and by declaring it to others, a movement is formed rather than just a bunch of people who are only hoping to solve their own problem. Once such self-interested people have succeeded or failed in their personal task they tend to care little for others who face the same issues they did and quite often exactly the same immoral business person they faced. If all those who have experience the effects of "phoenixing" and other morally criminal activities began instead to look at the objective as being the stopping of those individuals and practices for the sake of the future victims, then the fight would change from one of personal self-interest to one of virtue and there is nothing like a virtuous cause to make you feel good about yourself and to succeed in its aims.

May I suggest two things.

Firstly, if you have had your fingers burned by immoral business practice and have evidence that may lead to a prosecution or investigation by any government department, then write to the investigation wing such as VAT compliance and keep writing every time you find new evidence. Most importantly state that you are prepared to be a witness and urge others who know something to put their names forward as potential witnesses as well. Create paperwork for these departments and keep the pressure on until you get a result. I have found that they will eventually take you seriously if you show that you are serious. Make a formal request for maximum Bankruptcy Restriction Orders of 15 years for those who break the rules of their bankruptcy by involving themselves in business while they are un-discharged. An insolvency officer has the power to request this from the court. Personally, I am prepared to stand in a court long after my personal situation has been resolved one way or another, in order to tell the truth about those who I have witnessed in their illicit activities. I will be proud to do this where many others will simply say "I don't want to get involved". If you stand up for what's right, perhaps you will change things enough so that someone will stand up for you in the future.

Secondly, if accountancy firms actually refused to facilitate the activities of such serial business parasites, they would find it almost impossible to exist. If things are to change, good accountants must start to refuse to work for clients who operate in ways which are immoral and begin to advertise that they only deal with honest business people. I for one would put my business their way and I know that many others would too. To their shame, there will be accountants who are posting on this forum and even on this very thread who have clients who they know to be working the system to the detriment of their suppliers. Isn't it about time that good business people started to boycott those accountancy practices that are happy to directly facilitate the corrupt business activities of the very people who have been so condemned on this thread and others.

Contact the accountants that represent these crooked companies and individuals (will be named in Companies House records). Ask them  whether they still represent them and request details of their policy towards individuals who are serial bankrupts and who are involved in "phoenixing". If they do not reply within a stated time (say 14 days), then write to them again and tell them that you will be posting their name on internet forums as an accountancy firm who by their silence condones such activities by their clients. Request a response from your own accountants too. Refuse to be a client of any accountancy firm that does not openly state that it will no longer deal with serial bankrupts or "phoenixers". There is absolutely no reason in our modern society why someone should have the right to run or be involved in a business that repeatedly harms other businesses simply because it is profitable to do so.

Up until now accountants seem to have absolved themselves from the problem whereas in many ways they are the problem. If the accountancy industry was directly opposed to such immoral activity it would no longer exist as they have the power to refuse professional help and at the same time they could use their massive combined influence to change government policy. It is time we shifted much of the responsibility to this private industry that directly profits from the existence of individuals who repeatedly set-up and shut-down company after company for the wrong reasons. To many accountants this type of immoral behaviour simply makes them a good customer.

Say no to those accountants who are happy to work for business parasites. Say yes to those accountants who refuse to help such people repeatedly escape their debts by whistle-blowing their activities and by refusing to work for them in future. Moral accountants must be identifiable for the custom of moral business people.

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By The Black Knight
07th Nov 2011 12:27

ethics

Many accountancy firms do follow a code of ethics as laid down by our professional bodies.....we also subscribe to a draconian complaints and penalty system with our professional bodies..................Have a look at our rule books on the web......and complain if you know of less than professional practices.

However we do not normally have to deal with such clients as they are likely to pick advisers that will help them, they usually don't like us when we say "it should be done this way" or the fee is to high to get it right.

I agree with your sentiment but please be careful you do not defame the honest and honourable amongst us. The honest need supporting not burning in the witch hunt as well.

I think a few people do pick their accountant because he/she is straight....but many also ask for dodgy so that they do not have to declare their cash takings..............I often have to excuse myself explaining we are not that sort of accountants and they are best of where they are.

This will not change unless HMRC make some public examples...

The market is such that many expect you to fiddle their taxes for as cheap as possible.

I would not pick accountancy as a career choice if I had my time again.

 

p.s you might also like to equip yourself with the knowledge of the Money Laundering Regulations 2007 and the Proceeds of Crime Act 2002 in your Quest. An accountant who suspects his client is deliberately defrauding would be required to make a report to SOCA the Serious Organised Crime Agency.....they will not do anything either !!!!

Like the website of shame Idea....but be careful only factual information is included or a defamation suit is likely to follow.

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By cb30
08th Nov 2011 10:59

Fantastic help everyone

Thank you all for your input and advice.

 

Investigator1 - I think you have hit the nail on the head about morality - probably for both ourselves and dusty - we feel personally hurt and angry about what these people have done. We are a small family business and at the end of the day it is our money - not some big multinational who have no idea what is going on daily. 

 

The fact my Mum has to work an entire year for this amount of money is terrible! And its a mixture of one the money, but two the fact that these people do not care! If it was myself who owed money I would be awake worrying about it, and contacting them to try and sort out part payments etc. But these people have no morals - despite their associations with various religious institutions I have found out! I wonder what these people at their groups would think if they knew.

I think for now - we must decide the amount of time we can spend on it - since I am heavily pregnant and the other two family members get soooooo angry about the situation, I think I need to take the action to enforce for now - so bailiffs etc so its on record for others to see - whereas noone seems to have done this before - he just closed his other companies down and so suppliers like myself had no idea of his history - at least this way there will be one warning to people.  Then lets see where I can go with the research and letters etc. I think you just get so deflated spending time preparing files, letters etc to HMRC, Companies House etc - because each response you get is basically "sorry - no not our problem". Which is disheartening.  But it needs to be done.

 

 

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By EnglandPi
03rd Nov 2017 18:45

Whilst I appreciate this question was posted in 2011 the debt just maybe within the statutory time limit of six years (Statute of Limitations Act) so I would like to help is possible.

First of all you need to understand that companies house are form processors nothing more, they have zero investigative or enforcement powers.

If something is against the companies act it is up to the complainant to take it to Court, companies house can not.

There are several solutions to your problem, for instance. If a company goes into administration or liquidation or is simply struck off and say for example the company was called 'truck hire limited' and the same directors open another (phoenix) company, rising out of the ashes of the old company say 'Truck Hire (London) Limited, provided they are doing the same thing with the same director the Insolvency Act can make the new company pay the old company's debts.

If the company that was struck off was a sole director he can be held personally liable for the company's debts because the company was stuck off and did not go into liquidation or administration. If I can be of more assistance please email me at [email protected]

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