Liquidated Competitor Still Trading - Allowed?

Discussion in 'Insolvency' started by Sarjayne, Feb 13, 2018.

  1. Sarjayne

    Sarjayne UKBF Newcomer Free Member

    2 0
    Hi - looking for some advice please. I found out a few weeks ago that my main competitor (a photography portrait studio) has gone into voluntary liquidation. Liquidator was appointed 6th Dec 2017. But the company's website is unchanged and they are still taking bookings. They have made minimal changes to the name and logo on their website, but the URL is the same (and it is the name the limited company trades under). They are still active on social media and posting about shoots that they are undertaking. 4 members of staff have been made redundant but the director is still working as studio photographer.
    I am confused as I thought you had to cease trading once you had gone into liquidation. According to their statement of affairs they have liabilities of over £150K. Are they allowed to carry on trading for a time until the company is completely wound up? They take full payment up front for their photo shoots as well as selling gift vouchers so anyone booking in advance with them could stand to lose their money. Thanks in advance for any replies :)
     
    Posted: Feb 13, 2018 By: Sarjayne Member since: Feb 13, 2018
    #1
  2. Simon Green

    Simon Green UKBF Contributor Free Member

    98 8
    How did you find out a few weeks ago that they had gone into voluntary liquidation?
    Company’s of all sizes, shapes and even with different noises come and go and then re-emerge through what may appear from the outside is dense fog.
     
    Posted: Feb 13, 2018 By: Simon Green Member since: Dec 4, 2017
    #2
  3. Scalloway

    Scalloway UKBF Legend Free Member

    13,265 2,871
    There is nothing to stop them using the same name a sole trader as long as they drop reference to limited in their name.
     
    Posted: Feb 13, 2018 By: Scalloway Member since: Jun 6, 2010
    #3
  4. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    1,953 246
    Nothing to stop them doing a Phoenix. There are regulations that the directors cannot be a Director of another company with the same or similar name for 5 years but there are some exemptions that can help them work around this.

    If you have concerns the Pheonix is illegal and the Newco is using the oldcompany's assets, having not acquired them from the Liquidator, then you should report your concerns to the Liquidator.

    Newco may find that T.U.P.E law has applied so they may find the employee claims being rejected in the Liquidation and landing on their mat for settlement.
     
    Posted: Feb 13, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #4
  5. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    4,537 1,274
    I didn't know that.

    I know of two companies who craftily changed the name of their company prior to putting it into Administration and formed a new one the same day with the same name as the other company had been trading as in the hope that no-one noticed
     
    Posted: Feb 13, 2018 By: Ian J Member since: Nov 6, 2004
    #5
  6. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    1,953 246
    Hi Ian

    Administration is different. The Rules seem to only applies to Liquidations, strangely enough.

    More info here if you are having trouble sleeping...!

    http://www.legislation.gov.uk/ukpga/1986/45/section/216
     
    Posted: Feb 13, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #6
  7. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    4,537 1,274
    Quite the opposite as I have problems staying awake but thanks for the info anyway :D
     
    Posted: Feb 13, 2018 By: Ian J Member since: Nov 6, 2004
    #7
  8. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    1,953 246
    Hopefully that should help - you can read the whole of The Insolvency Act 1986...!
     
    Posted: Feb 13, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #8
  9. Sarjayne

    Sarjayne UKBF Newcomer Free Member

    2 0
    Thanks for your replies so far everyone. I understand that anyone can liquidate a company and then set up as a sole trader running the same business, but surely not under the name she's been using for the last 16 years!
    Her full limited company name can be shortened to a 4 letter abbreviation which she has always used as her logo. It looks like she is now using this abbreviated format of the name. But it would be very difficult for anyone to distinguish that this is a different company.
    The website is the same, social media accounts are all the same. The old limited company name is still mentioned several times on her homepage. She even still has all her staff listed on the website (even though she has made them redundant).
    If I was a creditor I would be absolutely livid as she is carrying on as if nothing has happened and is obviously still getting customers through the door and taking money using the branding and reputation she has built up over the years. Am I being too sensitive or is this verging on criminal behaviour?
     
    Posted: Feb 13, 2018 By: Sarjayne Member since: Feb 13, 2018
    #9
  10. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

    4,899 1,046
    Posted: Feb 13, 2018 By: GraemeL Member since: Sep 7, 2011
    #10
  11. Mr D

    Mr D UKBF Legend Free Member

    7,454 777

    We know less about what they are doing than you do.
    Could be either.

    If you think they are acting illegally then report them to the relevant authorities. Does not mean they are acting illegally though.
     
    Posted: Feb 13, 2018 By: Mr D Member since: Feb 12, 2017
    #11
  12. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    1,953 246
    She may have bought the rights to use the assets from the Liquidator.
     
    Posted: Feb 14, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #12
  13. Salfordian

    Salfordian UKBF Newcomer Free Member

    2 0
    If it was voluntary liquidation, unless you have information to the contrary, there is no reason to suppose the creditors of the company have not been paid. Perhaps the proprietor decided for whatever reason to simplify and reduce operations whilst continuing in the profession as a sole trader. It happens.
     
    Posted: Mar 4, 2018 By: Salfordian Member since: Mar 4, 2018
    #13