Repeated dissolution of LTDs then restarting

[4x4Tyke]

OddCat said:

ReaderScars said:

This relates to investment in the business and whether the business owner can and has relinquished any obligations to investors by dissolving, renaming and carrying on.

There is a big difference between being an 'investor' in the business and being a 'creditor' of the business. I have massive sympathy for the latter but little for the former. If you have invested in a business, and have a shareholding, then you should be keeping tabs on the activities of the employees / directors.

Surely, normally "phoenixing" is done by the owners to protect their investment (to the detriment if creditors who get shafted) ? Otherwise is pointless ? Unusual for an investor to get shafted ?

Their investment is secure in the parent company which typically 'loans' working capital to the subsidiary by various means. Unless they ps off the HMRC they take defacto control of the administration. The shadow directors escape prosecution by letting directors of the subsidiary take the fall.

[Oakey]

Alpinestars said:

It's pretty easy for creditors to sue the liquidator/administrator if they think that's the case. Very few professionals would take a risk of a personal liability.

More likely, is that the owners pay the best price for the assets. Perhaps because they are not worth much to anyone else.

But it's more expense with no guarantee you'll get anything at the end of it.

We've just been through this with a business we dealt with. They owed us about two grand and after issuing legal proceedings it turned out the company we originally dealt with (who our signed contract was with), let's call it wkers Signs Ltd, was dissolved in Feb 2015. Then in March 2015 a new company was incorporated, also called wkers Signs Ltd. Same business address, same director, the lot. The Director also had previous when a creditor bankrupted him in 1999.

[Alpinestars]

4x4Tyke said:

OddCat said:

ReaderScars said:

This relates to investment in the business and whether the business owner can and has relinquished any obligations to investors by dissolving, renaming and carrying on.

There is a big difference between being an 'investor' in the business and being a 'creditor' of the business. I have massive sympathy for the latter but little for the former. If you have invested in a business, and have a shareholding, then you should be keeping tabs on the activities of the employees / directors.

Surely, normally "phoenixing" is done by the owners to protect their investment (to the detriment if creditors who get shafted) ? Otherwise is pointless ? Unusual for an investor to get shafted ?

Their investment is secure in the parent company which typically 'loans' working capital to the subsidiary by various means. Unless they ps off the HMRC they take defacto control of the administration. The shadow directors escape prosecution by letting directors of the subsidiary take the fall.

The administrator runs a company in administration. Shareholders, creditors and directors don't.

There's a waterfall which has to be followed by the administrator, and HMRC are ranked in that waterfall, the same as any other creditor is.

[bucksmanuk]

Red Devil said:

48k said:

You often find people get around the ownership issue by having their spouse be the director of the new company.

If there is sufficient evidence that the individual concerned is acting as a shadow director that little scam could unravel.

Or a close friend of theirs - in this case it was a resurrection of a double glazing company.
Another one again, this time the guy was using his wife but with her maiden name, in this case a restaurant.
Another example, the guy was using his wife, but using her first married name, she had been married 3 times…. Some property dealing in conjunction with a golf course…
All dodgy people ....

[Sa Calobra]

Always run their details through a credit checker site (we used one that had a traffic light? system). I can't remember the name.

That way we avoided doing business with one (who surprisingly wasn't fussed about what we charged/even bothered to negotiate, ran the check and wow they were repeat offenders).

[Evolved]

You must work for the same company we used to supply. They also 'googled' themselves and found my thread slating them. I ended up removing it but regret doing so as it could have saved other people from being ripped off.

Sa Calobra said:

Always run their details through a credit checker site (we used one that had a traffic light? system). I can't remember the name.

That way we avoided doing business with one (who surprisingly wasn't fussed about what we charged/even bothered to negotiate, ran the check and wow they were repeat offenders).

I'm guessing the op has a bad situation. We had one such- I came on here asking for advice, PH'ers sluethed and posted up all the info about them, that person(s) must have been in the habit of googling themselves and found the topic and threatened to sue! Even though they were the ones who owed 10,000+.