Hello, and thank you for your assistance. 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.
From what I have researched so far, it would appear that my strongest suit might be to make an application to the Court to ‘pierce the corporate veil’, although I am aware of the following:
▪ s.899 Companies Act: Court sanction for compromise or arrangement.
▪ s.900 Companies Act: Powers to court to facilitate reconstruction or amalgamation.
▪ s.938 Companies Act: Power of court to summon meeting of member or creditors of existing transferee company.
▪ s.1031 Companies Act: Effect of court order for restoration to the register.
I am therefore unsure if I would be better off requesting that the liabilities of the “transferor company” to be transferred to “the transferee company” rather than pursuing the ‘piercing the corporate veil’, or if in fact another option might be best – or if there is some way of completing the N244 in such a way it opens up all options to the judge rather than narrowing the scope of the application thus permitting him/her to make a decision at their own discretion…?
Any advice or recommendations would be welcome.