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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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I took over a company on 8th November 2013. Unbeknown to

Resolved Question:

I took over a company on 8th November 2013.

Unbeknown to me, that company failed to file its annual accounts for the year ending 31st August 2013 which were supposed to be filed by 31st May 2014.

I received a notice from Companies House saying that they were late and I then filed the accounts for that company on the basis of the previous accounts which were dormant (I do not have access to their records so this was essentially a guess).

However, Companies House have fined me £300.

The share transfer agreement to me contains the following clause:

"It is understood and agreed between the parties that the Transferee is not assuming and will not be liable for any of the liabilities, debts or obligations of the Transferor arising out of the ownership of the Company or the operation of the business carried on by the Company prior to and including Completion and that the Transferor, its officers, employees, agents and shareholders will not be liable for any of the liabilities, debts or obligations of the Transferee or the Company arising out of the ownership of the Company or the operation of the business carried on by the Company after Completion.
The Transferor will indemnify the Transferee, the Company, its officers, employees, agents and shareholders against all costs, expenses, losses, claims and liabilities, including reasonable legal fees and disbursements, or demands for income, sales, excise or other taxes, suffered or incurred by them arising out of the ownership or operation of the business carried on by the Company prior to and including Completion. The Transferee, and the Company will, jointly and severally, indemnify the Transferee, its officers, employees, agents and shareholders against all costs, expenses, losses, claims and liabilities, including reasonable legal fees and disbursements, or demands for income, sales, excise or other taxes, suffered or incurred by them arising out of the ownership or operation of the business carried on by the Company after Completion."

Since filing the accounts for that period was their obligation, can I sue them for the £300 fine because they did not meet this obligation?
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

Have you informed them of the fine and asked them to reimburse you under the indemnity provisions which you have set out in your question?
Customer: replied 3 years ago.

Hi, yes I have. I emailed the CEO about the fine and I mentioned the indemnity provisions in the agreement.


 


They have said it is not their responsibility because:


 


1) They said I had 9 months after the year end to submit which wasn't done.



2) The accounts would have needed to be submitted after I had taken over so they couldn't have submitted anyway.


 


 


 


 

Expert:  UKSolicitorJA replied 3 years ago.
I am afraid it is then a question of ascertaining whether or not they are correct.

If the obligation to file accounts first arose on 31st August 2013, then you have a good ground to claim against them under the indemnity as they cannot justify not paying under the indemnity simply because the last date to file the accounts was a date after Completion.

In my opinion, you are in the right and they are in the wrong and they are liable under the indemnity.

As they have refused to reimburse you for the fine, you may now file a court claim against them for the money, easiest to do this is online at www.moneyclaim.gov.uk

The court will have the final say if they defend your claim.

May I help further?

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