When does a Ltd company need to cease trading?

[Bluemeanie]

Hello All - first post

It appears I become involved with some fairly unscrupulous business people who are running two companies with almost identical names.

One of the companies is currently in compulsory liquidation (I believe related to unpaid taxes), the order to wind up was issued in September 2005. No accounts had been filed for this company since February 2003 and two notifications of strike off were printed in the London Gazette in 2004.

When would this company have needed to cease trading?

Thanks!

 

[Jayne]

Sorry, cannot answer your question.

But welcome to the forum

Jayne

 

[Bluemeanie]

Sorry, cannot answer your question.

But welcome to the forum

Jayne

Thanks

 

[Brin]

When a company is solvent, the directors have to manage it's affairs for the benefit of the shareholders, looking after it carefully as if they were trustees. When a company becomes insolvent their duties change. This is because they are no longer 'playng with the shereholder monies, they are putting at risk creditors' monies. So they have to do what is right for the creditors, and that may mean having to shut the company down. So you need to decide when was it precisely that the company became insolvent: the definition of insolvency is when the company's liabilities exceeded its assets or it could not pay its debts when they fell due. This may have been an awful long time ago given what you are saying about the failure to submit accounts and to pay the government departments.

As soon as a company becomes insolvent, the spotlight is on the directors, all of them, on what they did do and did not do. If they did not do the right thing, and the Liquidator has the benefit of hindsight, they can be made to contribute to the assets in the liquidation and be banned from being a director.

So, ask yourself: when did the company become insolvent? what did you and the other directors do after that time? what should you have done (and this could have been to cease trading)?

Being a director of a limited company, and enjoying the privilege of limited liability, carries with it a lot of duties. Saying that you got involved with the wrong crowd or arguing that you only played a minor part in the management of the company will not protect you from being banned as a director or being forced to contribute into the liquidation. Each and every director will be held responsible for what has happened.

 

[Bluemeanie]

Thanks for the response Paul. My initial post was in fact very vague. When I say I got involved, what I actually mean is I conducted business with them and unfortunately, now I am owed money.

The situation is that this company was contracted by a third party to conduct some consultancy work. I was then hired independently to do the work and was to be paid once they had been paid by the third party. I lived up to my end of the deal and the company was then paid. Alas, they have not paid me and have given me a plethora of excuses and have missed many deadlines to pay.

The company that was paid by the third party was the company that is not in liquidation and I have been told this by them. Now alot of this is my own fault, call it naive if you will and I have learned alot as a result of this situation. I have an email contract :roll: with the representative of both companies, he is managing director of the company in liquidation and is currently representing the one that is not. The listed Director of the company that is not in liquidation was also a Director of the company that is in liquidation and I have never dealt with or had any correspondence with this gentleman. The affairs of the company in liquidation are currently being handled by the Official Receiver.

I'm currently trying to determine if I file suit, that they will say that I was contracted with the liquidated company as opposed to the one that is not.

I've also have copies of contracts between this company and third parties using the company number and address of the liquidated company (this is pre liquidation) but using the name of the newer company so that they can deposit the funds in that bank account and would be very surprised if any of this has been reported to the Official receiver.

Finally, the gentlemen I contracted with has told me and emailed me that he would pay me himself. Could I possibly go after him personally?

Sorry for the long post, any suggestions are welcome.

 

[Brin]

I would take a very practical course here. I am not a lawyer, and you could waste an awful lot of money trying to pursue what is clearly a rogue through the courts, he will always be one step ahead of you.

I suggest that you tell the MD that you know that he has been paid the cash and that you will tell the OR that the director has been diverting the bust company's assets to himself unless he pays you in full and within 7 days. Also tell the director that you will, at the ame time, talk to the customer who paid him, telling him that the debt remains unpaid as he has paid the wrong person. Tell him that you will also write to the DTI (the disqualification people, see the Insolvency Service website) with evidence of what he has done, to encourage them to take action to ban him as a director.

This should heap quite a bit of pressure on the director.

Remind the director that it is a criminal offence to divert company assets, and a civil matter which could get him banned as a director, a criminal offence to swear wrong statements in front of the OR.

Sounds very much like blackmail, I know, but highly practical.

And you have to be prepared to follow up these steps. Not just 'threats', actually do it.