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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11423
Experience:  30 years as a practising solicitor.
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I own a window cleaning company that is being forced to close

Resolved Question:

I own a window cleaning company that is being forced to close due to non payments from my clients. I sold off one of my rounds and individual who bought it is demanding a half refund. I don't have the ability to pay him and he is threatening legal action. what should I do. Please can you help
Submitted: 2 years ago.
Category: Law
Expert:  JGM replied 2 years ago.
Thank you for your question.
What is the basis of the claim against you?
Customer: replied 2 years ago.

They are saying that of the £2,000 worth of monthly customers that we sold have cancelled and that we therefore owe them half the money they paid back..

I have attached a copy of the contract of sale to this email.

We did offer a guarantee against the cancellations but as we as a company have been unpaid by others since the sale. We are currently owed £14,300 that we have absolutely no chance of receiving as the person owing it to me has gone bust.

I cannot honor the guarantee and I do not have the funds to repay

Attachment: 2015-07-11_153238_eamonn_taylor_20158_edited.pdf

half,

Expert:  JGM replied 2 years ago.
Firstly, here's nothing in the contract about a cash refund, only the transfer of more customers if some within the original contract cancel and that is only for a month.
Secondly, if you are closing the company down, then as it is a limited company, their claim would be limited to one against the company and not you personally. If your company has no money or assets then their claim is worthless.
Customer: replied 2 years ago.

I really thank you for the advice you have given so far.. It has help to simplify my position somewhat..

The individual I sold the work to (Eamonn) has said that I made claims against the work (which I did not) and that he recorded our meeting along with subsequent telephone conversations. I can not for the life of me think what he thinks he has proof of as we simply sold the business as it was described. We even took him out on a trail day with us where 4 or the 5 customers he cleaned were new customers so he could clearly see the customers and how the work was cleaned..

Below is an cut and paste of his email to me..





I can see from the attached that your company is being dissolved on the 9th August 2015.


If you don't pay me the £3,500 I will file a charge against you for the full amount of £7,000 before your business is dissolved, even though the court can enforce amounts due to creditors after the business is dissolved, under section 1000 of the Companies Act 2006: "(a)the liability (if any) of every director, managing officer and member of the company continues and may be enforced as if the company had not been dissolved, and (b)nothing in this section affects the power of the court to wind up a company the name of which has been struck off the register".




You can either pay me the money on Monday next week as Tuesday I will be starting the legal proceedings. As a due diligence back up I have recordings of the pre-purchase meeting I had with you and the three way call where you said you would pay in a couple of business days, just so you are aware.



Eamonn

This has raised two questions.

Is such a recording even legal?

If I had a guarantee in place and I did not fulfill on it then am I still liable..

What do you think of his email and the validity of his threats

I do thank you for your help here, and look forward to your response.

Daniel

Expert:  JGM replied 2 years ago.
A recording is legal but to what extent it is relevant to the contract is another matter.
However I don't think it matters. Do NOT allow the company to be struck off as that will result in your personal liability and you can't do so where there is a claim against the company.
However the good news about that is that it leaves any creditor to pursue the company and they can't pursue the directors. So by leaving the company in existence a creditor has to pursue the company, cannot pursue the individuals and if there is no worth in the company they will not be able to recover.
You did not grant the guarantee, the company did.
Customer: replied 2 years ago.

Ok one last question..

You appear to say that I be pursued as an individual if the company is closed.. I was given to understand that debts and liabilities are tied to the company not the director.

Expert:  JGM replied 2 years ago.
Not if the company is still on the register. Your problem is that you're trying to have the company struck off and that's why I'm saying you should not do that. For as long as the company exists, even if it ceases trading, the company has the liability. If you strike it off wrongly then the directors could be personally liable.
Customer: replied 2 years ago.

I only found out today that the company is being struck off. I was sent a copy of this with the email I received from Eamonn. I have looked into it as much as I can whilst companies house is closed but it looks like this is absolutely my fault as I moved and did not tell companies house that I had moved.. Everyone communicated with us via email and I totally forgot to update the records. It would appear that I am being struck off due to my company return not being made with companies house..

I am thinking that I should offer to extend the guarantee with him and replace the lost customers (an option previously rejected by Eamonn) but as I do not have the funds to refund and the company is being struck off (date on the gazette notice 9/6/15 meaning the company will close on 9/6/15)

What would your professional advice be please

Expert:  JGM replied 2 years ago.
Do not allow the company to be struck off and submit the outstanding annual return.
You can't do anything about the guarantee if the company doesn't exit.
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