More confusing companies house reports

[Brown and Boris]

I always do a companies house check on clients before I begin letting them run up an invoice.

Went to see a company today (lets call it ABC Consulting ) with a view to doing some work for them. Plush offices, staff of about 30, client list as long as your arm.

Companies house registration number on their web site refers to an older company called say 'Smith and co.' with turnover/profit which probably wouldn't cover the rent in the offices I visited which I presume is parent company?

I noticed in the report on share holders of the older company was a company called 'ABC Consulting Services' (almost identical to the name on the door where I went today). Check on them reveals a relatively new company (Oct 2007) with the same office address and a very similar name and line of business who haven't files accounts yet, but the list of directors doesn't include the people I was introduced to as directions of ABC Consulting.

It could be that the company and people I went to see today is another company working under the Smith and Co. umbrella but it is beginning to feel like a lot of smoke and mirrors.

How can I find out which company I am dealing with and what they financial position is? Why would they be using the company house number of their old company when the company I visisted seemks to have its own number?

Edited by Brown and Boris on Thursday 10th April 22:52

[Brown and Boris]

The new company also seem to have a mortage chrage on them from Nat West Bank from when they set up, what does that mean;


Form type 395

Amount Secured: ALL MONIES DUE OR TO BECOME DUE FROM THE COMPANY TO THE CHARGEE ON ANY ACCOUNT WHATSOEVER


Short Particulars: FIXED AND FLOATING CHARGE OVER THE UNDERTAKING AND ALL PROPERTY AND ASSETS PRESENT AND FUTURE, INCLUDING GOODWILL, UNCALLED CAPITAL, BUILDINGS, FIXTURES, FIXED PLANT & MACHINERY SEE THE MORTGAGE CHARGE DOCUMENT FOR FULL DETAILS


I have nver seeen this before.

[JustinP1]

Christ, NatWest call the shots!

It could be simple and honest, it could be rather more strange.

On the one hand there are 30 staff, they must have some turnover. On the other hand, maybe the company was started as a separate offshoot with a big chunk of capital for the offices and staff. If that goes bust, its going to go bang.

What kind of work or credit limits were you thinking of?

The other thing may be to try would be a director's guarantee?

At the end of the day, you could be completely honest about the situation, and ask who are the directors and what the ownership is if they want credit. Otherwise, payment up front, and you both don't have problems.

[Brown and Boris]

It looks like they were a two man band ( turnover of about £200K and net profit of about £85K), but that the two man band sold out to this newly formed ABC company which they run! I am not up on the rules but my instinctive reaction was that they werre getting their own hard earned money out and running the new one partly on Nat Wests money in case it went t1ts up? It is a massive expansion with receptionists, marketing mnagers/directors, 3 IT staff, a bid writer and admin team backing up their consultants. I notice that a large number of the staff have 'director' status on the web site but not on the comopanies house records (which could be out of dat although there were updates in Jan 2008). Oddly I can't find the director I met on her professional body's web site, but that may be because she is using her maiden name/married name.

Normally when I get confused I explain that I routinely check company status before doing work which is paid on conclusion of the entire package, and could they just clarify who I was trading with and what their company house number is. Their web site suggests thst the company has been running for abour 15 yyears bit that is obviously fed Smith and Co ( who used to have another name prior to that).

[ukvoyager.info]

I wouldn't worry. Set your limit low, ask for 14 days payment with 50% up front. That way your max liability will be relatively small.

[Brown and Boris]

ukvoyager.info said:

I wouldn't worry. Set your limit low, ask for 14 days payment with 50% up front. That way your max liability will be relatively small.

The slight conflict is that they let it slip that they were currently interviewing technical staff from the business of a friend of mine. If they jump ship it may leave him in a bit of a pickle , and I am not even sure they are leaving for a company which isn't entirely stable.

I wil take the hint on the terms and deposits. Sometimes on big contracts we have been 3 or 4 months before first invoice ( it was 9 months with one govt deprartment who had no budget left, they gave us £200K of work but only had £100K in that years budget and we had to wait until the following April for the rest!). I am thinking they won't get the same understanding!

[Piglet]

I think the NatWest wording is standard wording for a fixed and floating charge - so they have a fixed charge over any assets (might be worth doing a Land Registry search to see if they own the building or have a long lease that might have value?).

They also have a debenture over anything that the company owns.

I'd imagine that any company that has bank finance would have something similar on it's record. We record Rent Deposits as 395 charges.

I don't think that is sinister on its own.

I'd imagine you have the right idea about why this has happened - don't forget the proposed change in CGT may have acted as an incentive to the founders to get their money out at the end of last year to avoid a bigger CGT bill.

We see quite a lot of Newco's - lots of businesses will start a Newco for each location of their business (Newco (Bristol), Newco (Northampton) etc).

I guess it depends on your exposure and what sort of contract you are entering into. Unless it's something big I'd imagine they'll tell you to sod off if you want a directors guarantee.

[tigger1]

Looks like a spade - CHECK
feels like a spade - CHECK
sounds like a spade - CHECK...