Paying Ltd Co Invoice to director

Paying Ltd Co Invoice to director

Didn't find your answer?

A Ltd Co (Co A) has received as normal an invoice for another Ltd Co (Co B) for services rendered.  They have deducted the CIS in the normal way but the director of Co B says their bank account has been closed and could the cheque be written out to him.  So whilst the paper trail up to that point is absolutely fine, what are the implications for Co A writing the cheque to the director? 

On checking Cos House it does look like Co B is about to be struck off as whilst it is stating its still "active" the accounts and Annual return are well overdue.

Replies (5)

Please login or register to join the discussion.

avatar
By duncanedwards
24th Jun 2014 12:33

Risk?

I wonder what Co A's position is if Co B is insolvent?

Is there an ongoing relationship with Co B's diector(s)?

I'd be tempted to send a cheque to the company as previously.  As best the situation is murky so why lay yourself open to involvement in something you might wish you hadn't?

Thanks (0)
avatar
By SJRUK
24th Jun 2014 12:37

no relationship

No, there's no relationship with Company B.  I agree the worry is that Co B is insolvent and the director is trying to divert funds.

Thanks (0)
avatar
By User deleted
24th Jun 2014 12:40

Not A's problem

Cheque should be made payable to Company B, end of story. If B's director wants to try and bank it in his own account then he needs to discuss that with his bank. (And don't even consider a request to settle the invoice in cash :¬) )

Thanks (0)
avatar
By Richard Willis
24th Jun 2014 12:45

Just by way of education

does CIS apply when both parties are limited cos?

Thanks (0)
avatar
By User deleted
24th Jun 2014 12:55

@Richard

Yes - why wouldn't it?

Thanks (0)