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I was asked by a client to perform a due diligence check on a very successful firm of solicitors that have many accreditations to their name. They have two trading names that according to their website and letterhead are trading styles of their limited company.  The problem is the limited company in question is DORMANT and has filed zero value returns to companies house. This is not a new company but I cannot find accounts information anywhere.

Any ideas of a next step would be most appreciated also do I have a duty to report and if so to whom? 

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paddle steamer
By DJKL
29th Aug 2014 16:55

Is it possible you can contact the solicitors directly?

 

No idea of the scope of your client's instruction to you,  and whether by asking you would in any way reveal who your client is, however is it possible for you to contact the solicitors in question and ask them to clarify the anomaly you have detected?

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Replying to Justin Bryant:
By EnglandPi
29th Aug 2014 17:17

At this stage 'tipping off' is not an option

I need to know more, there could be  vat, tax and compliance issues. 

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paddle steamer
By DJKL
29th Aug 2014 17:31

Could it be laziness re letterhead/ website

 

If the company is dormant at Co House, was it always so, or did it cease being active a bit of time ago?

If the latter maybe searching for an LLP of similar name, possibly formed at circa the time the Company ceased trading, might bring joy or a quick search re the directors  of the dormant company and their other directorships might assist.

Law society accredited firm listings etc may also shed some light on matters.

There have recently been instances of fake law firms, used for fraud, being reported, however if the firm is long established (The indication of awards, if genuine, suggests they can't have sprung to life last week) then I would not consider this as that likely just yet.

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paddle steamer
By DJKL
29th Aug 2014 17:38

Re duty to report

 

The company you are doing the search on is not your client and I am unsure if you are registered under ML regulations anyway. I am no expert re this but not sure you have a ML reporting requirement even if you are ML registered. No doubt someone else here will know more about this than I do.

You do probably have a duty of care to your client and may need to report your findings to them.

At this stage you do not, from the information you have provided, appear to have any proof of any crime/wrongdoing, you merely have an anomaly that needs to be checked out before reporting to your client. (unless you have other information re the solicitors you have not revealed, your comment re vat/tax compliance issues suggests you may have information you have not shared)

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Replying to lionofludesch:
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By duncanedwards
29th Aug 2014 18:31

Thought it was just me

DJKL wrote:
At this stage you do not, from the information you have provided, appear to have any proof of any crime/wrongdoing, you merely have an anomaly that needs to be checked out before reporting to your client. (unless you have other information re the solicitors you have not revealed, your comment re vat/tax compliance issues suggests you may have information you have not shared)

 

It's a strange situation but, as you say, I couldn't see how the facts stated could be indicative of some reportable wrongdoing.

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By WhichTyler
29th Aug 2014 23:02

Perhaps...
... They don't trade through the limited company. What is the body in their invoices and agreements? It could well be a partnership, which you won't find at companies house

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By johngroganjga
30th Aug 2014 09:54

The possibilty that the firm in question is filing false accounts showing that an active trading company is in fact undertaking no activity is but one of a number of possibilities. It seems to me that it is by far the most unlikely one, but what do I know?

So you just have an unexplained anomaly. What you do to resolve it It will depend on your instructions.

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David Winch
By David Winch
30th Aug 2014 10:47

Just a thought

Could it be that the firm has only recently started to trade through the (previously dormant) company & the latest accounts filed at Companies House pre-date the new arrangement?

I presume you have checked the company registration number on the firm's letterhead ties in with the dormant company you have searched.

Could there be a limited company & a LLP with similar names?

Go back to your client & tell them you have an apparent anomaly & see what they want you to do about it.

I would not be in a rush to file a ML report until you have a better understanding of the situation.

David

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By bernard michael
30th Aug 2014 11:01

Also in addition to all the above check the ownership of the domain name and when it was registered. These may give you other clues

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Euan's picture
By Euan MacLennan
30th Aug 2014 11:35

Agency?

If the solicitors were just using the company's name, but were actually trading through another company or partnership, I think the company might be entitled to file dormant accounts.  As far as I remember, there is a box on form AA02 (DCA) to indicate that it is only acting as an agent.

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