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Stuart J
Stuart J, Solicitor
Category: Employment Law
Satisfied Customers: 22620
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
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I have a Ltd Company XYZ Ltd but someone else has started an

Customer Question

I have a Ltd Company XYZ Ltd but someone else has started an identical business in his own name trading as XYZ. Is he allowed to do that?
Submitted: 4 years ago.
Category: Employment Law
Expert:  Stuart J replied 4 years ago.
-Could you explain your situation a little more?
Customer: replied 4 years ago.

My husband died last year and I inherited his 50% shareholding in his Limited Company. The other shareholder also has 50% BUT he has started a new business in his own name Trading As the same name as the company. So he is using the name to trade outside of the company. Can he do that?

Expert:  Stuart J replied 4 years ago.
Is he still involved with the original co? Is he doing the same thing?
Customer: replied 4 years ago.
No, he is not involved in the company business which is practically dormant.

Yes he is using the company name to carry on business in his own name
Expert:  Stuart J replied 4 years ago.
If the original co is practically dormant what is the problem? What do you want to happen and why?
Customer: replied 4 years ago.


I don't want him to benefit from the hard work my husband put into the business and wish to protect its trading name whilst the family decides whether to continue with it.

Expert:  Stuart J replied 4 years ago.

 

You have a
potential claim against him for breach of duty (to act in the best interest of
the original company) and for compensation/damages in "passing off" because he
is attempting to profit off the back of the original business.



It really comes
down to how much you want to spend taking this to court if he simply refuses to
change the name.



Assuming that
that was not an issue, and leaving it aside for a moment, the amount of
compensation that you could get be very difficult to quantify because the
company is no longer active and it will be difficult for you to say what the
company as a result of his actions.



To summarise: you
do have a potential claim/cause of action against him






You can always
get a solicitor to write to him threatening an application to court for an
injunction and costs and see what reaction it gets. We get many such questions
on here from people who have had those kind of letters

Can I assist any
further with this? Please bear with me today because I will be online and
off-line clients.



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Customer: replied 4 years ago.

Thanks for your help, we are consulting with our family and will return to you if we need any further advice.

Chris

Expert:  Stuart J replied 4 years ago.




Glad to assist.





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