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Client dissolved company with fees owed

Should we complain?

Didn't find your answer?

Client filed a DS01 which was duly processed and the company struck off. They didn't inform us as they should have. I'm not interested in the money but should I take action, if only because I never liked them?

Replies (29)

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By paul.benny
08th Jul 2021 14:50

If not the fees, what do you hope to achieve by taking action?
And is it worth your time?

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By Justin Bryant
08th Jul 2021 14:58

Just be glad it wasn't for c£30bn+, as is the case for HMG (or rather us) with BBLs etc.

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By Paul Crowley
08th Jul 2021 15:08

Been there with companies house
Co house just not interested, will take no action.

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By Duggimon
08th Jul 2021 15:14

Well why not, what's the worst that could happen?

If nothing else it might prove quite annoying for them.

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Replying to Duggimon:
A Putey FACA
By Arthur Putey
08th Jul 2021 17:28

That would kind of be the idea

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By Wanderer
08th Jul 2021 15:26

Think you should have objected between the time that DS01 filed & company struck off.

Coy House will just tell you that it was published in the London Gazette and onus is on you to object before the strike off.

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Replying to Wanderer:
By Duggimon
08th Jul 2021 15:50

Wanderer wrote:

Think you should have objected between the time that DS01 filed & company struck off.

Coy House will just tell you that it was published in the London Gazette and onus is on you to object before the strike off.

Reasonably sure that if they file it and don't mention it to the creditors, they've lied on the DS01.

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Replying to Duggimon:
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By Paul Crowley
08th Jul 2021 16:14

Yes and Co house will agree, but Co house will do nothing.

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Replying to Duggimon:
A Putey FACA
By Arthur Putey
08th Jul 2021 17:29

That is my point. I wouldn't have objected to the DS01 because I knew there was no money, so it is all about non-compliance with the conditions for a solvent liquidation.

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Replying to Duggimon:
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By Wanderer
08th Jul 2021 18:15

Yep, no doubt they have. That's one of the reasons for the delay so creditors can object, if they spend their lives scouring the London Gazette.

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Stepurhan
By stepurhan
08th Jul 2021 15:37

Small claims court to the directors on the basis that they failed in their statutory duty to inform creditors of the striking off?

I have no idea if that would work on its own (IANAL) to pierce the veil of incorporation. As others have said, is it worth the time, even though I understand your feelings on the matter.

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Replying to stepurhan:
A Putey FACA
By Arthur Putey
08th Jul 2021 17:31

I don't want to claim any money, just to teach them a lesson, vindictive bar steward that I am

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Replying to stepurhan:
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By legerman
08th Jul 2021 18:38

stepurhan wrote:

Small claims court to the directors on the basis that they failed in their statutory duty to inform creditors of the striking off?

I have no idea if that would work on its own (IANAL) to pierce the veil of incorporation. As others have said, is it worth the time, even though I understand your feelings on the matter.

My thoughts as I started reading the thread.

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By waldron
08th Jul 2021 17:07

I have set up to be notified by Companies House of any filings for all my clients.

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Replying to waldron:
RLI
By lionofludesch
09th Jul 2021 07:19

waldron wrote:

I have set up to be notified by Companies House of any filings for all my clients.

Yes I always used to set mine up with PROOF, email reminders and email notifications.

It's been invaluable over the years.

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A Putey FACA
By Arthur Putey
08th Jul 2021 17:36

I could always spend £280 on an attempt to get the company restored by Court Order, then wait for CH to dissolve it again when it failed to bring its filing obligations up to date!

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Replying to Arthur Putey:
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By bernard michael
09th Jul 2021 09:37

Arthur Putey wrote:

I could always spend £280 on an attempt to get the company restored by Court Order, then wait for CH to dissolve it again when it failed to bring its filing obligations up to date!

Gosh they must have really p*****d you off to want to wast time on them
What's their HMRC situation - can you get them involved ??

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Jennifer Adams
By Jennifer Adams
08th Jul 2021 18:54

Its a lesson and (most) of us have been there and worn the tee shirt.
The lesson is to tighten up on debts.
Should you ever take anyone to court -I've done it myself just to give myself the satisfaction and to learn the process = I won both times.

Should you ever decide to spend the £35 it would cost to take them to the Small claims court then you have to have shown that you have given them notice - ie tried all you could to get payment.

So I send 2 statements online and then I record delivery the next with a red sticker saying 'Final Request - please send your remittance within 7 days otherwise we shall be obliged to take further action'.(you can get them from Labels Oline .co.uk)
Usually does the trick.
If not take pleasure in applying for a CCJ.

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Replying to Jennifer Adams:
ALISK
By atleastisoundknowledgable...
09th Jul 2021 10:40

I’m 4/4 with MoneyClaimOnLine, c£5k. But only as a last resort when I know I’ve lost the client (although shockingly, one of them stayed with me..?!?)

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Lisa Thomas
By Insolvency Practitioner
09th Jul 2021 10:46

You could:

1) Apply for a CCJ in small claims, if you have a PG from the directors

2) Pay to reinstate the company. Get a CCJ against the company. Pay CEO's ("bailiffs") to try and recover assets the company probably doesn't have. Also a resik in the meantime Companies House will strike the company off again for non filing of statutory returns...

3) Per 2) above but instead of getting a CCJ, pay thousands to liquidate the company, if your debt is over £750 (or you can find out creditors to join you with issuing a joint winding up petition)

4) Hope that eventually the Insolvency Services will investigate this particular company when they get their retrospective powers to investigate directors without first having to reinstate the Company.

5) Walk away. Hard to do, I know!

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By Gone Sailing
12th Jul 2021 18:08

I "FOLLOW" all my clients.
Best to see it coming.

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Replying to Gone Sailing:
Flag of the Soviet Union
By thevaliant
13th Jul 2021 11:50

Always worth while for any reason.

Had a client many years ago who would hire and fire directors and not tell us. Several sets of accounts went in with wrong directors listed until I started following them at Companies House.

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By SteveHa
13th Jul 2021 09:51

There's no vindication for being vindictive.

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By Adam12345
13th Jul 2021 10:13

Contact ex-client saying you didn't receive the DS01 form as a creditor. Say you will begin the process of getting the company restored unless fees are settled.

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By I'msorryIhaven'taclue
13th Jul 2021 11:16

Our LofE contains a clause which (I hope) amounts to a director's personal guarantee:

3.5 In the event that your company is unable to meet our fees, each of the undersigned directors and / or officers agree to indemnify I'msorryIhaven'taclue Ltd for any outstanding or accrued amounts, and to assume personal liability for their payment and all legal costs incurred in connection with any proceedings attached to that capacity, to the extent permitted by law.

I'm currently giving the clause an outing against the director of a PSC which the Company Registrar elected to strike-off; an action which HMRC (rather generously, I thought) failed to oppose. We'll see!

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Replying to I'msorryIhaven'taclue:
Flag of the Soviet Union
By thevaliant
13th Jul 2021 11:53

Won't work, but nice try for putting it in.

Personal guarantees need to be both clear who you are holding liable and also witnessed. Neither will have happened.

I had a client many years ago who did this on his sales. All sales orders, he slipped in a personal guarantee. Used it very successfully as a 'stick' but never got to court on any occassion as I suspect it would've failed.

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Replying to thevaliant:
All Paul Accountants in Leeds
By paulinleeds
13th Jul 2021 12:24

The 'personal guarantee' can be drafted as a novation clause.

I have a clause in my T&C and specifically draw attention to this in the covering letter. This isn't a PG but the ability to legally transfer the debt of the limited company to a named person on a particular event e.g. non-payment of company invoice.

I've had solicitor quote this novation clause in letters before action with Co clients.

I understand that a well written novation clause does work

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Replying to paulinleeds:
Flag of the Soviet Union
By thevaliant
13th Jul 2021 16:35

Interesting.

The other reason I suspect it may not work (Even this novation) is who is signing. Whilst audit clients should have new engagement letters every four years, accounts prep clients do not.

A situation might arise whereby a client COMPANY is engaged and the LoE signed by Director A. Five years pass, Director A sells up to Director B (unrelated). Five more years pass and rinse and repeat. Director C, also the sole shareholder, hasn't signed a new LoE, neither did Director B (some just don't - and as disengagement because of failure to sign a LoE just doesn't happen you're stuck with the original LoE from 1987).

If Director C then fails to make the company pays its liability, you might turn to the LoE.... signed by Director A.
I wonder if you would really be able to attach company liability to Director A?
I wonder what a judge would make of it.

It's why I don't think these things are enforceable (along with the lack of witness, and near certainty to advice legal advice is taken). You can potentially bind people who don't have any involvement with the company when the time comes to try and enforce this term.

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Replying to thevaliant:
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By I'msorryIhaven'taclue
13th Jul 2021 13:35

thevaliant wrote:

Won't work, but nice try for putting it in.

Personal guarantees need to be both clear who you are holding liable and also witnessed. Neither will have happened.

Thanks, Valiant. I had a feeling it might be unenforceable in a court. And I guess electronic signatures serve only to further cloud the issue. Still, it might be sufficient for a single director company whose director acquiesces to the signature being his. Luckily, that's where I am currently with my PSC client.

It is as you say a useful stick with which to beat the client; provides ready-made moral-high ground for threatening to resurrect the company, as in Arthur's case.

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