How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ash Your Own Question
Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
75100385
Type Your Law Question Here...
Ash is online now

A friend of mine has been made sole director of a ltd company

Resolved Question:

A friend of mine has been made sole director of a ltd company by her boyfriend. She is in an abusive relationship which has been reported and is leaving him, he is basically running the company is running up bills in her name and trading insolvently, he intends to leave her with all bills and taxes that are owed, the company is about 2 years old and already has debts in her name due to him, he is also using her personal bank account for the company and getting paid in cash, she is very scared of what may happen.
What does she need to do and what are the consequences for her legally.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : If she is the sole director, how is he using the company bank accounts and how come there are debts in her name please?
Customer:

hi

Alex Watts : He
Alex Watts : Hello. I am on the train so may be on and offline.
Customer:

There is no company bank account he is using their personal bank account and transferring the money into his sisters and friends accounts, the debts are in the company name of which she is sole director, as he is controlling the money and basically the company he is not paying anything, she already has the bailiffs knocking on the door. She is already tying to liquidate the company, but the accountant is his friend and is not helping her and rarely takes her calls.

Alex Watts : Is it a limited company?
Customer:

yes it is limited company i stated in first message.

Customer:

cheers

Alex Watts :

Yes I needed to check. Have accounts been submitted? You know its illegal to run a Ltd company money through personal accounts?

Customer: Yes first year accounts were submitted he is unable to get any bank account on his own his is basically just using her, drawing or transferring all money out of bank account as soon as it's there most of it being cash jobs and not paying any bills. What is her best course of action, he intends to leave her liable for everything,
Alex Watts :

Ok - you need to STOP using a personal account.

Alex Watts :

If he is not a Director he is NOT entitled to take money out.

Alex Watts :

You need to open a business account.

Alex Watts :

Company debts unless there is a personal guarantee would never be personally liable.

Alex Watts :

So they do not need to worry.

Alex Watts :

But you MUST get the accounts moved.

Alex Watts :

Once the accounts are moved he will have to access to the accounts and your friend can do with it as they want.

Alex Watts :

However in terms of the sums taken out of the personal account that does not belong, they need to add this uip

Alex Watts :

up

Alex Watts :

She then need to write and set out the losses and request full payment within 14 days or say they will go to Court within 14 days. You should make sure you send this recorded delivery and keep a copy.


 


If they do not pay then your friend can issue proceedings in the County Court. You can either do this online at: www.moneyclaim.gov.uk or by completing form N1 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf and take it to your local County Court.


 


The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.


 


If the matter is defended it will be set down for a trial. If the claim is for £10,000 or less it will be a small claim and you will not need representation.


 


Can I clarify anything for you about this today please?

Customer: She just wants to close the company and have nothing more to do with him but is worried where she stands with the taxman and legally I've told her to contact the taxman and tell them exactly what has been going on, but she is worried that as director she is liable for everything he's been up to
Alex Watts : Yes I would agree.
Customer:

do you think she will get into a lot of trouble if she explains exactly what he has been doing

Alex Watts : There may be an investigation but if she owns up it may only be back tax, if any, she owes
Alex Watts : Does that clarify?
Customer: Ok thanks as he has every penny she should be prove as it's gone to his sisters account
Alex Watts : Yes indeed.
Alex Watts : If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.Please bookmark my profile if you wish for future help: http://www.justanswer.co.uk/law/expert-alexwatts/
Ash and other Law Specialists are ready to help you