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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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I have a contract with a company who are advising they can

Resolved Question:

I have a contract with a company who are advising they can take legal action to reclaim monies that were paid to the company, because they may have not been paid to the company bank account. Some monies were paid into an individual account as one of our Directors had bad credit which affected our ability to run the business bank account. We took advice on this in the past and were informed that there was no legal obligation to run a business account, as long as monies were accounted for.

Our business has now been dissolved pending administrative restoration, due to some rebranding issues, which caused late filing of accounts. The business owes us over £9,000 in outstanding fees, and some of the fees have already been paid, and have never until been disputed.

Can you please advise on our risks and likelihood of recovering these monies please?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 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 as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Was this a Limited Company please?

Customer:

Yes, it was. The company was dissolved on 22nd April 2014, for late filing of accounts. We were not immediately aware of this, as the notifications were not forwarded on time, from our registered mail handling service, and I had been on holiday. Consequently, we have inadvertently pursued this debt, after the company had been dissolved Gherkin Capital Ltd, but this was partly due to a rebranding process which has caused us some problems.

It is our intention however, to restore the company to the register as soon as practical, which means we could still pursue this debt, subject to understanding the risks involved here in any potential counter claim.



Alex Watts :

I am not quite with you - if the Company does not have any bank accounts how do you propose to get the £9000?

Customer:

Yes, the company was Gherkin Capital Limited, and was dissolved on 22nd April. This happened inadvertently as the notifications from companies house were never forwarded to our trading office, and our accountant had neglected to red flag the situation. I was also on holiday which didn't help. Consequently, we have unwittingly pursued this debt the week after our company was dissolved, but now all communications have ceased.

They have appointed a solicitor who has written to us asking for a response to his requests, for more information surrounding payments, and promises that we will refrain from action, by Monday 12th May. We are unable to respond to this as the company is no longer trading. Our advice so far has been no further action can be taken against us as they have no legal entity to litigate with. Nor, can we pursue this debt, until the company has been restored to the register.
We are in the process of rebranding anyway, which has caused some of the delays in accounting, so it is our intention to restore the company to the register as soon as practical, but I am obviously conscious of the risks of any personal counter claim here. Again, we have been advised that there isnt really any legal substance for such a claim but seek clarification on this matter.

Thanks.


Customer:

We would need to restore the company first, and either re-open another company bank account or have the monies paid into a personal bank account - under trust.

Alex Watts :

Ok - really payments should have been paid into the Company accounts

Alex Watts :

The Company is a legal entity, it is not like you are a partnership where you would have been able to pay it into individuals accounts

Alex Watts :

The money belongs to the Company not to you or the individuals

Alex Watts :

So you should have paid it into the ltd company account

Alex Watts :

I appreciate one person has bad credit however there are bank accounts you can get with no credit

Alex Watts :

You would need to restore the company first before taking any further action

Alex Watts :

You can't pay it into personal accounts, it simply does not belong to you - it belongs to the Company

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

We had tried this route but many of the non status providers would not provide an account due to the nature of the business

Alex Watts :

But you can't use personal accounts

Alex Watts :

You must restore the Company back to seek to recover the £

Alex Watts :

Can I clarify anything else?

Customer:

I understand we need to restore the company to pursue the debt. I also understand that monies should be paid into a company account. However, companies house advised us that there is no legal requirement for a company bank account, which is why previously we had taken some monies into personal accounts. What i need to understand is does this present us with a legal risk of the client taking action against us personally whilst the company is dissolved and (our current understanding ) is they cannot pursue a dissolved company. And what are our risks associated with restoring the company and pursuing the debt through the normal company bank account means?

Alex Watts : You are right they can not pursue a dissolved company.
Alex Watts : But they can pursue you if you took payments personally after the company was dissolved.
Alex Watts : You are better off restoring the company and then any dispute would be between the limited companies together.
Alex Watts : Does that clarify matters?
Customer:

No monies have been taken after the company has been dissolved. Can they pursue me for any monies taken before the company was dissolved was my question? In any case, once the company was restored would the limited company not be able to counter claim, after all, if there is to be any issue about who those monies were due to - the overriding factor is it is due to the company and not the client?

Alex Watts : Before it was dissolved - no
Alex Watts : Once restored yes the company could counter claim
Alex Watts : Does this help?
Customer:

Yes, that helps a lot thank you. So either way we should be protected.

Alex Watts : Yes.
Alex Watts : Please remember to leave feedback before you go today.
Customer:

Ok thanks Alex.

Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience: Solicitor with 5+ years experience
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