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Joshua, Lawyer
Category: Law
Satisfied Customers: 29201
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I have a question about a contractual obligation, payment

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I have a question about a contractual obligation, payment and my business' current standing within the situation
JA: What state are you in? And have you consulted a local attorney?
Customer: Herts, No
JA: Has anything been officially filed? If so, what?
Customer: Nothing has been filed. Just trying to find out what my obligation is personally & professionally.
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Not necessarily

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

how may I assist with the above please? Are you able to kindly outline a little more detail as regards ***** ***** in question?

Customer: replied 10 days ago.
2 years ago I joined a marketing agency as an intern directly under the director at 50 Creative Solutions Ltd. After completion, the director and I decided to invest in expanding the company and I take on a more controlling role. This came with hiring 2 remote workers through a local agency called Smart Working Solutions under a monthly contractual basis. That contract was signed by myself, in the name of 50CS (although I had no controlling stake, my boss told me to sign it). Later, the director went to prison for fraud and the owner of the company turned to me to take over (long crazy story, nothing is official and I'm still not a registered employee there). To protect myself and make the payments of the agreement, I opened a second company Argyle and Associates Ltd. Since then, i've been paying Smart Working from my personal directors loans A&A. Now, I have a cashflow problem that has prolonged my repayment to SW and they're threatening to cancel the service, take us to court, blah blah blah...I'm not from the UK, i'm American, so i don't know the legal nuances of what rights I have, how liable I am for these debts, what the impact is on 50CS and the owner (who is unaware of the agreement) , what the impact is on A&A (not vat registered, paying the tab for a vat registered companies bill), and what, if any, ways I can either get out of this or minimise the impact of it's consequences. Attached is the copy of the signed agreement by myself while as an intern and the former director.
Customer: replied 10 days ago.
If possible, please help me understand where I stand.Cheers,
  1. to be clear, what is your position as regards ***** ***** Ltd? Are you a director of that company?
  2. have you given any personal guarantee on behalf of the company to SWS Ltd?
Customer: replied 10 days ago.
My current position is nothing at the moment. I am not a director, I don't think I'm even an employee right now. I'm just running it because I like the owner and he needs the help to keep it afloat, plus i'm heavily invested in it's success. The owner and I have been in talks about myself taking over, but nothing has happened yet.I have not given ANY personal guarantees to SWS on behalf of 50CS or A&A. Honestly, I've been just making the payments to try and keep the workers employed and meet the agreement's requirements.

thank you. Do you have any financial interest or otherwise in ensuring that the agreement in question is maintained or ultimately, if the agreement were to be ended, would it have little consequence for you?

Customer: replied 10 days ago.
This agreement, and an identical one with only my signature signed a month after, have cost 50CS and myself £3200 per month for 4 months. Out of the 4 months, the remote workers have generated around £2500-3000 in work total. I gave them a chance, the couldn't generate enough money to keep them employed. So would I benefit from cancelling it? Absolutely. If the agreement were to be ended, 50CS/A&A would lose the income that the 2 workers are generating, but obviously it would relieve a huge amount of debt superseding that income anyway. Does that answer your question?

thank you. Based upon what you describe above, the agreement is with a company 50CS Ltd which you have no shareholding nor managerial role as director and I have not provided any personal guarantee. Accordingly, if that company breaches the terms of the contract due to non-payment or otherwise, the action available to the other party to the contract would be as against 50CS and not you or your company providing payments have been made through 50CS albeit funded by your company.

Accordingly, based on the above information, if you are comfortable with the consequences of the contract lapsing which from what you say would be a net benefit at least as things stand, I cannot see there is any particular financial implication on you beyond that

Customer: replied 10 days ago.
Great, now based on the agreement, since I'm technically running 50CS for the owner right now (who's a really great guy). What would be the implications on the company and the owner himself if the agreement were to lapse? I'm not sure if it means anything but myself and the former 'director' never controlled any stake in the company. I would hate to just dump it on the owner for a mistake myself and essentially a conman created.

the company (50CS) is its own legal "person" and as such the contract is as against the company not the shareholder of the company (your friend). As such, any claim against the company would be limited to company funds and not your friend's unless he has given a personal guarantee in respect of the company's obligations.

Customer: replied 10 days ago.
Okay, going back to this:'Other party to the contract would be as against 50CS and not you or your company providing payments have been made through 50CS albeit funded by your company.'The payments made for the agreement were sent from Argyle & Associates bank accounts. Are their any consequences from doing that?

it is not ideal as it could be evidence of an attempt to form a contract is between your company and the supplier but on the basis that the involvement of your company was simply to pay the amounts in question, you would have a strong argument that such payments were made as agent for 50CS and not as a party to the contract

I hope the above answers all your questions. If there is anything else I can help with please reply back to me otherwise thank you very much for visiting JustAnswer and I hope we will see you again in the future.

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