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Debt collection - is director personally liable?

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alexdavies

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Nov 19, 2008
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Hi,

Last year I did some work for someone who turned out to be somewhat slippery. They ran up a debt of £4K with me in unpaid sales commission (yes, I've learned my lesson), and they were paying it off slowly - however they have now stopped altogether and stopped answering calls. They claimed they were going to wind their company up, made a few promises to pay me personally then went silent about 6 weeks ago. They did give me details of the Insolvency Practioner they were going to use, who when I called last week for an update told me that they hadn't paid him so weren't liquidating their company.

I've had enough of this messing around, and want to put a stop to it. I'm aware that suing the company could be a waste of time if they are insolvent, however I have reason to believe I may be able to sue the owner personally.

The reason is that I've kept copies of their cheques. I was invoicing "Company Name" as instructed, and I notice that some of their cheques have been from "Company Name Ltd.", and some of them have been from "Mr. B. Debtor T/AS Company Name". I suspect he was doing this for some dodgy tax reason, but that's not my concern.

Am I right in thinking this mixing and matching of limited company and sole trader may have left my debtor open to personal liability?
 
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You have quite a sticky one there.

There's a few points I can see from your post, most of which are in your favor!

Firstly, if they are not insolvent as they have not gone through with the insolvency...then they are still liable for all business costs incurred...seek legal action immediately, even a small claims court summons. They are only about £80 to get the ball rolling.

Secondly, if they are insolvent then you will get paid by their insolvency agent. You will need to find out who they are using. Again, as they won't respond to you...seek legal action against them.

Thirdly, if he was never actually a ltd company this is corporate identity fraud and you can sue the individual accordingly.

By the sounds of it you have numerous cases, non payment, company liability, fraud.

I would say your next step is make a claim to the small claims court. Use both alias's...the TA and Ltd., they should be able to track him/them down. Consequently, you will find out all the info and it will only cost around £80.

You could also try doing a search for the business on the "companies house" website...where all Ltd. companies are listed. This site will also tell you the past and present financial records they have submitted at the end of year...if they filed a big one last April...then I think you have an even bigger hammer to hit them with.

Keep us posted and good luck!
 
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You could serve both parties a County Court claim for the entire debt. As it is under £5000 it will be allocated to the small claims track. You may have difficulties in proving exactly how much the individual owes if anything as the court may hold the view that the individual is only liable for the amount paid by cheque and may not hold the view that the individual is liable for the full amount.

It would be wise to see a solicitor in person with all documents you have so the liability issue can be ascertained and the strength of your claim in recovering the entire debt from either party.
 
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Did you by any chance have an order form made out to the individual t/a company name? This would be a contract then with the individual rather than the company.

Agree you should see a solicitor with your paperwork to see what is the best route for you to take now :)

Good luck
 
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