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First Gazette Notice for Voluntary Strike Off and Possible Fraud

First Gazette Notice for Voluntary Strike Off...

A friend has just asked this. It looks potentially serious, and rather urgent, but it's not the sort of thing I've ever had to deal with. Can anyone suggest if it's a serious as she thinks it might be, or what she might do?

"What does 'First Gazette Notice for Voluntary Strike Off' mean in a Companies House record? My mother has been hideously defrauded for 1000's of pounds and the company of the person who has done it has this in their Companies House record. We are worried that he is trying to get her to pay off all his debts and then he will shut the business down leaving her no way to get any of her money back. Would really appreciate an interpretation of the language."

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02nd Nov 2014 00:19

It means somebody (perhaps companies house due to non filing of accounts) or the directors themselves, has applied to have the company struck off the register.

Any creditors of the company can object to this.

If nobody objects, and the company is subsequently struck off, any assets owned by the company (including cash in the company bank account) will then become under the ownership of the crown under a term known as 'bona vacantia' (meaning no owner).

The company's creditors will go without, should the company be successfully struck off. They (any creditors or interested parties) should therefore raise an objection if they wish to recover their monies.

Are you (or your mother) connected to the company by way of control or are you simply creditors thereof?

Further info needed

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02nd Nov 2014 08:08

Voluntary strike off means that the directors declare that the company is solvent and does not have any creditors; but it is no longer needed.
Were your mother’s dealings with this company or the person(s) behind it or another connected company? What transactions took place?

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02nd Nov 2014 09:21

I think she's been fleeced out of the money, rather than being a creditor. Apparently the police have been informed, but reckon no crime has been committed, although my friend thinks/hopes they will change their mind when more information comes to light.

I've sent her the link to this discussion so she can follow it.

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02nd Nov 2014 09:45

Not a creditor?
If she has been fleeced by the company she is by definition a creditor. If she does not think she is entitled to some money back from the company she has not been fleeced.

Presumably there is a civil legal process under way for her to recover the money she has allegedly been wrongly parted with. If not, that begs the question of whether she has really been fleeced.

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02nd Nov 2014 13:15

Police - no crime

Alleged frauds are notoriously time consuming for the police to investigate and (meaning no disrespect) a typical non-specialist police constable will not have the knowledge & skills to make much headway in investigating such an allegation.

Declaring that 'no crime has been committed' closes the matter (from a police point of view) without the need for any investigation and without leaving any unsolved crime.

Of course if the matter is purely a difference of opinion between your mother & someone else regarding what money (if any) is due to her then no crime has been committed.

The crime of fraud necessarily involves dishonesty on the part of the offender.  It is that element of dishonesty causing loss which distinguishes a criminal case from a non-criminal one.  So if you want the police to take an interest you need to highlight for them the alleged dishonesty.

However the primary role of the police is deter / prevent or investigate crime leading to the arrest & prosecution of offenders.  It is NOT their primary duty to seek recompense for the victims of crime.

As others have said, if your mother is owed money by the company she should register at Companies House an objection to the proposed striking off.

If she has been 'fleeced' then she should instruct a solicitor to commence a civil legal action to recover what she has lost.  That is her job - not the police's. The police do not offer a free debt collection service!

David

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02nd Nov 2014 13:12

Would you be able to disclose the name of this company so we can check ourselves on the record and update you further?

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02nd Nov 2014 14:41

I don't know any more about this than what I've written. As I said earlier, I've passed on the link to this discussion to my friend, but I don't think she's seen it yet. She just asked if I could offer any advice, as the only accountant she knows, but I'm the wrong sort to be able to answer!

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02nd Nov 2014 16:16

I suggest she would be better speaking to a solicitor than an accountant.

David

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05th Nov 2014 12:09

Sad but not unusual

 

 The point is the notice is "Public" so that we have a chance to object to the winding up.

 Form DS01 Striking off application by a company:- Read section 2 para.2 concerning sections 1004 and 1005 of Co.Act 2006.

In these sort of circumstances, offending directors are often economical in their interpretation of the sections. If you are able to demonstrate this to legal department at Co.Hse, you may cause pain to said directors.

 I believe that improperly signing this form is now "Criminal" as opposed to "Civil" offense.

  So far as the law is concerned:

 My personal experience is, to stand a chance of succeeding in  getting the police (CID) interested you must be able to prove a specific loss, exact amounts. If you can show that you have been dishonestly deprived of a specific sum, and how it was dishonest, CID must take note, and give you a crime number. If you cannot prove a specific sum, they will not look at it.

 You may also have to prove intent to defraud. This is not easy, and is why most crooked directors get away with this sort of thing.  I give you an outrageous example.

 Goods were supplied to a small retail chain for the Xmas sales period. The company declared insolvent on December 27th. Lo and behold there was not stock in its shops or cash in its bank.

 The half-dozen  aggrieved suppliers banded together and went straight to counsel. Counsel's advice was if we cannot prove intent to defraud we cannot win, if you want to pursue the case the estimated advance payment for legal costs to get it into court is £20,000. This was forty years ago. What it would be now, I dread to think. I can supply a number of such examples.

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By DJKL
05th Nov 2014 12:45

You are right re possibly criminal

 

Small world, I had cause to look up the sections just yesterday.

I discovered that an LLP which owes one of our companies money, and has granted us a Standard Security over its property asset as security for all sums,  applied for striking off in July. If I had not by chance looked on Companies House yesterday it was scheduled to be struck off in December, this would then have involved the somewhat costly exercise to get it reinstated.

Needless to say we had not, as a creditor, been advised within the required seven days of the original application ,which is, I understand, an offence under CA 2006 s 1006(4); certainly that is what I pointed out to the LLP members yesterday via e mail as I enquired "what the h*** are you doing"

Insofar as I read the section if the omission was due to the intention to conceal the making of the application the offence is aggravated which can bring about a seven year sentence (Albeit I expect in practice rarely, if ever, used)

Luckily in our case there does not appear to be any malicious intent, just stupidity! The members of the LLP did not appear to realise that if the striking off proceeded the asset would become bona vacantia, they thought they were converting an LLP to a bare partnership.

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By trecar
05th Nov 2014 13:12

Director's actions

Not quite sure where it would stand but if a director has contravened the companies acts then there may be the potential to speak to dept. of BIS re possible sanctions under the disqualification of directors rules. Fairly sure past misbehaviour or criminal or reckless behaviour does count when considering sanctions. Sometimes its better to go for the individual rather than the company. Although of course if it is a case of recovering monies from a company it is essential that the company remains on the record and is not struck off. But I have to admit there is a terrible dearth of information to enable anyone to make any sort of informed comment.

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05th Nov 2014 14:05

Notifiable parties

It is a requirement stated in Section 4 of the Striking Off application form that all notifiable parties are informed within 7 days of the form being sent to Companies House.  Notifiable parties are creditors, shareholders, other directors, employees etc.

With this in mind, you can object to Companies House.   Guidance is available on how to do this and in which circumstances it is possible to object.  This is mentioned in Section 5 of the form.

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05th Nov 2014 16:44

who were loans made to ?

You imply the money was/is in the company but how did the money end up in the company ? If the money was lent/given to the person (and you have some evidence) rather than directly to the company ....and then they paid the funds into the company then there would a claim against the person's personal assets (assuming they have any) which may more chance of succeeding in getting funds back. Evidence that mother was the only one to suffer loss would at least support the need for an investigation. It maybe worth objecting to keep the company open in case there is a need to obtain any of the company records but the mother's bank should be able to trace where the funds were paid to/give a copy of the cheque to show whose name was on it to establish the facts. Of course if the funds were actually paid directly to the company,especially if it was an investment company, the position is completely different and it may be very difficult to prove that the loss is not just the result of bad investments in the normal course of trade. If the directors have made the application to strike-off there are normally no assets in the company by then. You really need more detail to establish whether there is any likely case to answer......and, sadly,even proving fraud may not get funds back unless it can be attached to the directors personal assets or prove that company funds were paid to him personally before applying to close the account. 

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05th Nov 2014 17:13

Weak Companies House

I had a client who made such an application for a voluntary strike off. Despite not being solvent and not advising creditors, Companies House just shrugged their shoulders and refused to listen to objections to the striking off. I think you will need to demostrate actual substantial loss before Companies House will act.

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By jholmes
07th Nov 2014 09:10

Two things

Firstly a voluntary wind up is not a liquidation, as such a wound up company can be reinstated to the register via a court order.

Secondly, if a fraud has been committed by the Directors, then the Directors have failed in their fiduciary duty to the company and can be held personally liable for any debts (i.e. the veil of incorporation is removed).

the reality is though that, as previously mentioned, proving fraud is notoriously difficult. If you believe your friends Mother is a creditor, then object to its removal on companies house. This will at the very least buy you some time (this is of course assuming your friends Mother has not already been written to by the company as a potential creditor and failed to respond).

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By AS
07th Nov 2014 11:45

Objection to Companies House

In my experience, Companies House will only accept objection to striking off from a creditor if the creditor can produce evidence that they have taken legal action to recover the debt. Their view is that if the creditor has not taken legal action, then the debt is not due and the striking off can proceed.

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By jholmes
07th Nov 2014 12:00

Not in my view

Hi AS,

I must say that isnt my experience. HMRC will trawl CoHs and object regularly (though some slip through) of basically any that have been marked to be struck off. I have even known them to object to striking off where a DS01 has been filed correctly and HMRC have been written to confirming no tax due. (i think they may have some juniors go through a Co HS CD and object to any new ones- that may just be my overactive imagination though)

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