While I have already submitted several questions to Just Answer relating to this case, you appear to be the most knowledgeable expert I have come across so far. I therefore wanted to ask you a couple of follow-up questions (added below) but do let me know if these needed to be submitted to yourself as ‘new questions’.
Presently I am researching ‘piercing the corporate veil’ and if it could potentially be applicable in my case. I am preparing a Witness Statement to accompany a N244 and just wanted to ensure I was using the correct language. The circumstances are as follows:
► A Ltd. company refuses to acknowledge wages due to an ex-employee.
► The ex-employee commences proceedings to go to court and a trial date is set.
► The Ltd. company continues to trade despite being insolvent.
► The directors of the Ltd. company set up as a Sole Trader/Partnership and transfer all business to the new company (offering the same services, for the same prices, from the same address, with the same members of staff).
► The directors allow the Ltd. company to ‘die-off’ due to non-compliance with Companies House (relating to filing) while continuing to trade as the new Sole Trader/Partnership – thus avoiding liquidation or administration.
► The ex-employee, as Claimant, is unable to pursue the case in court as the official Defendant (the Ltd. company) officially no longer exists.
Question A:- Directorships
I have looked into searching for directorships via Companies House, but I need to sign up for a ‘direct account’ and apparently this can take up to 10 days and so I’m not sure if I can get the answers I need fast enough – would it support my case to be able to provide such proof, or do you think a Witness Statement and printouts of the currently-trading companies website would suffice?
Question B:- Substantiating evidence
I am not sure if the judge will have access/to hand the original court bundle when reviewing the N244 application. I also don’t know how much evidence I need to provide to substantiate my claim, if any beyond my Witness Statement. I was thinking of including the following:
(RE: Point 10: “What information will you be relying on, in support of your application?”)
► A copy of the original financial breakdown (from the bundle).
► A copy of my original invoice to the company upon my resignation (from the bundle).
► A copy of my Schedule of Loss (from the bundle)
► A copy of the Defendant’s solicitors Schedule of Loss/solicitors fees (from the bundle)
► A copy of correspondence with the Defendant admitting certain monies owed (from the bundle).
► A copy of correspondence from the Defendant admitting cash-flow difficulties (from the bundle – to substantiate their awareness of the problems and ability to have taken earlier action)
► A summery timeline of key events (for clarification and quick reference in lieu of inclusion of the entire original bundle).
► Print-screens of the Companies website to confirm continuation of trading with same staff, offering the same services, from the same address as of April 2014.
► Copies of old timetables (as of time my case started) to substantiate they are the same as currently advertised services.
► A copy of the relevant London Gazette notices.
► A copy of my correspondence with Companies House confirming the reasons for dissolution, and relevant dates.
► Copy of any adverts in local papers (if able to collect) to prove continuation of provision of same services during the transfer period in question.
► Proof of when the directors set up as Sole Trader/Partnership (if I can get proof from HMRC).
► A new Witness Statement (from myself) detailing recent events.
Please let me know what of this list you believe is appropriate for me to include, and if there is anything else I ought to consider.
Question C:- Correct Wording/Phrasing for N244
In light of the complexity of this case, and that I have heard that ‘piercing the corporate veil’ is a rare occurrence, I am cautious not to inadvertently narrow the scope of what the judge can do via incorrectly completing the N244 form. For point 3 (“What order are you asking the court to make and why?”), I therefore wondered about writing the following:
To make an application to the Court to ‘pierce the corporate veil’; requesting that individuals be included as Defendants. Namely, [name of director 1] and [name of director 2] – the former Directors of [name of company] (the 1st Defendant).
To make an order pertaining to s.900 of the Companies Act 2006 for the amalgamation of the dissolved company [name of company], and the currently trading business [name of 2nd company], and the subsequent transference of liabilities from the transferor company to the transferee company; thus making provision for the continuation of legal proceedings against the transferor company.
At the discretion of the Court [or should that be ‘Judge’?].
– Do you think this would be suitable? Would it allow the judge more freedom?
– Is the phrasing correct/have I used the correct legal terms?
Question D:- Other Options
After drafting the above, two further options were brought to me attention:
1. To make an order pertaining to s.216-217 of the Insolvency Act 1986 (= Personal liability for debts following contravention of s.216-217).
However, I am not sure if this would be applicable as they effectively became inactive and waited to be struck of and dissolved, as oppose to being liquidated:
2. That apparently new regulations means the liability should be transferred automatically via ‘Transfer of Undertakings’ (TUPE): http://www.acas.org.uk/index.aspx?articleid=1655
However, as I do not yet know if they are operating as a Sole Trader/Partnership etc. I do not know if this applies.
In light of the above, I do not know if I should add either of them to the ‘OR’ options already drafted (Question C), or if I should in fact replace any of the options in my original draft with either of them.
Any information or advice you could offer would be greatly appreciated.
Many thanks for your time. I look forward to your response.