[Finance] Dissolving a company

[rippleman]

Just to mention that you have to give formal notice of the intention to wind up a limited company. This gives the opportunity for any creditors to object to the company being wound up whilst the debts are owing. This can drag things out....is it worth it for a trivial parking fine?

As already suggested, the car if it is legally owned by the company, would have to be sold (nothing to stop it being sold to a director provided at fair market value) and the fines can be paid from the proceeds.

 

[Gazwag]

From what I've observed of people closing down limited companies Companies House and the Insolvency Service are an absolute joke and don't appear to have the motivation to enforce anything. The business owners simply don't submit accounts when theyre due and the company is then struck off a few months late with no comeback for the directors.

There is supposedly all the legislation within the Companies Act which company directors are supposed to abide by but when they don't Companies House just turn a blind eye

Agree, I know somebody locally who set up a company for his fencing business, earlier in the year the company went insolvent owing thousands to HMRC, banks, local suppliers. So he just set up a new company and still lives a flash lifestyle, kids at private school. He even has a 1901 in the South West Corner, but is a Spurs fan. IMO doing what he has done is legal fraud.

 

[albionalba]

When I dissolved my limited company a couple of years back my accountant told me it was important to ensure there were zero assets. So empty any bank accounts and sell all assets first. Something about the assets going to the government ....

This is an important point that is often overlooked. Although agree with other posters re CH actually doing anything about it tbh.

But as we've heard today AI and automation is going to be bolted onto every gov database so it won't be too long before every mis-step is picked up and followed up by a bot. Especially if it can generate revenues from financial penalties.

 

[Weststander]

When I dissolved my limited company a couple of years back my accountant told me it was important to ensure there were zero assets. So empty any bank accounts and sell all assets first. Something about the assets going to the government ....

It's called Bona vacantia (awaits jokes ). Companies have been caught out by this when awaiting certain tax repayments. Bank them first!

 

[Springal]

Agree, I know somebody locally who set up a company for his fencing business, earlier in the year the company went insolvent owing thousands to HMRC, banks, local suppliers. So he just set up a new company and still lives a flash lifestyle, kids at private school. He even has a 1901 in the South West Corner, but is a Spurs fan. IMO doing what he has done is legal fraud.

Happens all the time unfortunately. Usually a pre-pack deal done with the administrators.

See also CPFC !

 

[schmunk]

Agree, I know somebody locally who set up a company for his fencing business, earlier in the year the company went insolvent owing thousands to HMRC, banks, local suppliers. So he just set up a new company and still lives a flash lifestyle, kids at private school. He even has a 1901 in the South West Corner, but is a Spurs fan. IMO doing what he has done is legal fraud.

It might seem like a done deal, but with HMRC circling he'll have to remain en garde.

 

[MJsGhost]

Agree, I know somebody locally who set up a company for his fencing business, earlier in the year the company went insolvent owing thousands to HMRC, banks, local suppliers. So he just set up a new company and still lives a flash lifestyle, kids at private school. He even has a 1901 in the South West Corner, but is a Spurs fan. IMO doing what he has done is legal fraud.

He sounds like a monumental bellend.

The company insolvency stuff is reprehensible too.

 

[marlowe]

Agree, I know somebody locally who set up a company for his fencing business, earlier in the year the company went insolvent owing thousands to HMRC, banks, local suppliers. So he just set up a new company and still lives a flash lifestyle, kids at private school. He even has a 1901 in the South West Corner, but is a Spurs fan. IMO doing what he has done is legal fraud.

It's not even "legal" fraud, it's actually a criminal and imprisonable offence called "Fraudulent Trading" as defined under Section 993 of the Companies Act.

By setting up and running the new company with the intent and result of essentially defrauding the creditors of the former company they were in breach of section 993 of the Companies Act.

Section 993 states:

(1) If any business of a company is carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, every person who is knowingly a party to the carrying on of the business in that manner commits an offence.

(A limited company is a legal "person" so where it states "... or creditors of any other person" the term "person" also applies to the former company) .

(2) This applies whether or not the company has been, or is in the course of being, wound up.

(3) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding ten years or a fine (or both);

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum (or both);

Despite it being an imprisonable offence it is rarely if ever enforced, just like most of the Companies Act which isn't worth the paper it's written on. It's an absolute joke.

I know someone whose original company wasn't even insolvent, the managing director just wanted to defraud its creditors. He simply set up a new company and then transferred all the assets of the former company to his new company and began trading the new company in its place from the same business premises, using the same phone number and website as the original company, and he even used the former company's trading name, so to all external appearances it looked like the original limited company was still trading when it wasnt, it was just lying dormant with no assets.

This prevented all the creditors of the original company being able to pursue their debts. The transferring of the assets constituted another offence under the Companies Act, section 190 I believe. His various actions could also have constituted an offence under Section 4 of the Fraud Act, fraud by abuse of position.

He then went on to defraud a whole host of other people with the new company, Falmer Auctions Ltd trading as Falmer Auctions (which was also the trading name of the former company) .

Some of the people he defrauded are on NSC as he was selling parking permits for the Amex for the football season which they never got to use as he was never entitled to sell them. There were even a couple of threads about it at the time.

Companies House and Sussex Police were informed by several people what he was doing but neither of them were interested.

Even Brighton and Hove City Council knowingly facilitated the fraud as they benefitted from it indirectly. The original company (using loans from third parties) had subsidised a £100,000 conversion of the business premises which were owned by Brighton an Hove City Council. The people who had made the loans to the original company had expected to be repaid over the course of its trading during the term of the lease, which was in the original limited company's name. But the Council allowed him to breach the terms of the lease and let him trade his new limited company from their premises and rip off the creditors of the original company whose name the lease was in.

The Council wanted to keep on his good side because legally he could have dismantled and ripped out the whole renovation at the end of the lease to its former state. The Council didn't want that to happen so they allowed him to carry on fraudulently trading from their premises despite having been informed of what he was doing. They simply refused to enforce the terms of the lease which only permitted the original company to trade from their premises. The new company never had a lease for the entire time they operated, they just used the lease which was still in the original company's name. The original company was still a live company but was not being actively traded and no longer had any assets. He just kept it active to protect himself as he needed the use of the lease.

Even HMRC was a creditor of the former company but they couldn't claim their money back either because of Brighton and Hove City Council letting him fraudulently trade his new company in place of the original company, so the Council essentially looked after the interests of the fraudster against the interests of HMRC and the other creditors just so they could keep their shiny new conversion, which is what ultimately happened. The Council have got a shiny new conversion, the fraudster is long gone and there are loads of people who have been defrauded who were creditors of both companies including some NSCers. The NSCers who paid for parking permits were defrauded by the second company who were fraudulently trading with Brighton and Hove City Council's full knowledge and consent from their premises....

Match day parking availble at Falmer Auctions

http://falmerauctions.co.uk/amex-match-parking/ £270 for the season !

www.northstandchat.com

[Help] - falmer auctions parking

Is anyone owed money from Falmer Auctions after paying for a seasons worth of parking?

www.northstandchat.com

Companies Act 2006

An Act to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other forms of business organisation; to make provision about directors' disqualification, business names, auditors and actuaries; to amend Part 9...

www.legislation.gov.uk

 

[marlowe]

It might seem like a done deal, but with HMRC circling he'll have to remain en garde.

I don't think he's got any worries with HMRC. See my post above. HMRC didn't bother to pursue anything.