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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I'm being chased debt (that I'm trying to dispute) by

Customer Question

I'm being chased for a debt (that I'm trying to dispute) by a UK based company that is dormant. They have taken out a High Court Writ and are threatening to send round bailiffs. Can a dormant company do this as I thought they couldn't do this as a legal entity?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you with this.
If there is a high court writ then that is all the bailiffs need. Dormant just means in the previous trading period it was dormant. It does not mean in the current trading period the company is dormant. But sadly if there is a valid judgment then it can be enforced.
I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest.
Can I clarify anything for you about this today please?
Alex
Customer: replied 2 years ago.
Hi Alex, so if this can be enforced is their ant way to redress this? Can I pay the company and look to set aside the order and how practical is that as a solution?
Expert:  Ash replied 2 years ago.
Yes you can pay or set aside the order. But you need to do this asap on form n244
http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n244-eng.pdf
Does that help?
Alex
Customer: replied 2 years ago.

Hi Alex, in your experience what are my chances of getting an order set aside? I know it depends on the individual case but is this a strategy that works? Also, what happens if I do get the order set aside does the bailiff have to pay back the money held on account?

Best regards

Paul

Expert:  Ash replied 2 years ago.
Its hard to say, if there is a good reason that is fine. The court may say they can't enforce whilst dormant
Does that help?
Alex
Expert:  Ash replied 2 years ago.
Hi
I am just following up to see if there is anything else I can help with?
If this answers your question might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.
If you need more help please click reply.
Alex
Customer: replied 2 years ago.
Hi AlexThe company that has filed the claim was dormant according to accounts submitted to HMRC in 31 March 2013 and 31 March 2014. My contract with the company was signed in February 2013 and I understand that dormant companies cannot enter into legally binding contracts is this correct? If this is the case then the contract was and is unenforceable so this is a key part to my defence.ThanksPaul
Customer: replied 2 years ago.

Hi Alex

If this is the case can you give me the section of the 2006 Act that deals with this?

Thanks

Paul

Expert:  Ash replied 2 years ago.
Section. 1169 deals with dormant companies.
Alex
Customer: replied 2 years ago.

Hi Alex, what about my previous question please;

Hi Alex

The company that has filed the claim was dormant according to accounts submitted to HMRC in 31 March 2013 and 31 March 2014. My contract with the company was signed in February 2013 and I understand that dormant companies cannot enter into legally binding contracts is this correct? If this is the case then the contract was and is unenforceable so this is a key part to my defence.

Thanks

Paul

Expert:  Ash replied 2 years ago.
Yes they can enter contracts. It is usually whether accounting purposes, money etc that would be the key.
Alex
Customer: replied 2 years ago.

Hi Alex

What do you mean that would be the key, can you expend on this please?

Thanks

Paul

Expert:  Ash replied 2 years ago.
The Act states: A “significant accounting transaction” means a transaction that is required by section 386 to be entered in the company's accounting records.
Section 386 states:
(2)Adequate accounting records means records that are sufficient—
(a)to show and explain the company's transactions,
(b)to disclose with reasonable accuracy, at any time, the financial position of the company at that time, and
(c)to enable the directors to ensure that any accounts required to be prepared comply with the requirements of this Act (and, where applicable, of Article 4 of the IAS Regulation).
So anything that has monetary value.
Alex
Customer: replied 2 years ago.

Hi Alex

So would that invalidate a contract or just prove that they're breaking HMRC regulations?

Best regards

Paul

Expert:  Ash replied 2 years ago.
It would not invalidate any contract just those with Co House
Alex
Customer: replied 2 years ago.

Hi Alex, I'm not quite sure what you mean by this.

I know that companies that are trading have to cease all contracts when they do dormant so surely dormant companies cannot enter into contract?

Thanks again

Paul

Expert:  Ash replied 2 years ago.
There is a difference between ceasing trading and being dormant.
A company can be dormant in one accounting period but not in another.
Alex
Customer: replied 2 years ago.

OK, so in this case the company in question submitted dormant accounts for the year preceding 31 March 2013 and 31 March 2014 and my contract was signed in Feb 2013 surely this is a contradiction, you can't be dormant and have 'no significant accounting transactions'.

Can you find anything definitive please?

Thanks

Paul

Expert:  Ash replied 2 years ago.
That is correct. But it does not mean that the debt isnt owing the company.
What it means is that they should have reported to Co House they were trading. Does it invalidate the contract - no. Does it mean the debt is not payable - no.
Alex

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