How can I legally chase this debt.

[Parley]

Reposted from the wrong forum.

I have a installation company (company A) and about 5 years ago I set up a service company (Company B) both separate legal entities (LTD) I have over the last 12 months merged/renewed most customers over from Company A to B as the services are interlinked and I have just a few minor contracts left in Company A that will expire soon, when this happens and I have no more contracts in A I will file dormant accounts.

Some customers still have old debts carried over from Company A mixed in with some more recent invoices from Company B.

QUESTION:
I need to issue a LBA and possible court to one particular customer, do I have to issue twice (one for each company) and if so how can I ensure that all old debt from company A is transferd to Company B?

Thanks for looking.

 

[Scalloway]

You can assign the debt from one company to another.

http://uk.practicallaw.com/9-107-6754

 

[smallclaimsassistance]

Assignment is indeed the easiest way, and for the sake of clarity, the quickest way to do this is in one contract between A & B, rather than on each case. In fact, whilst I note that A & B are separate entities, is there no contract between them at all? If so, are you sure there is no clause therein dealing with migration of assets and liabilities? Such a contract, and such a clause, would, in circumstances such as those you describe, be usual.

Dean

 

[Parley]

So I can just claim for all the money regardless of which company the contract is signed in?

I have not got any agreement but as I own both companies I can always arrange this.

Thanks for helping

 

[Scalloway]

You need company A to legally assign the debt to B. This may be included in the transfer of all assets and liabilities. Who owns the companies doesn't matter. They are separate legal entities to you.

 

[Parley]

How do I go about this. Would a simple transfer agreement drawn up by myself suffice?

 

[Scalloway]

From here

http://uk.practicallaw.com/9-107-6754

the basic requirements for a legal assignment are as follows:

• Only the benefit of an agreement may be assigned.
• The assignment must be absolute.
• The rights to be assigned must be wholly ascertainable and must not relate to part only of a debt.
• The assignment must be in writing and signed under hand by the assignor.
• Notice of the assignment must be received by the other party or parties for the assignment to take effect.

As a non lawyer I would suggest that you need to handwrite and sign a document transferring the debt as director of company A, then write to the business you are chasing telling them that company B now legally owns the debt.

 

[Parley]

Brilliant, thanks Skalloway and anyone else that contributed.
Great forum.

 

[White Collar Legal]

I have a Deed of Assignment document if required. No charge for you sir

 

[Parley]

I have a Deed of Assignment document if required. No charge for you sir

That would be a mighty fine gesture. How would I receive this?

 

[White Collar Legal]

Hmm, that's a good question. I think my website is on my profile - send a message to us with your address details.