Thats what they normally do.
- Thread starter Rich#1984
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Thats why i was stitched up for 40k. They had a nunber of phoenix companies sitting in the wings so any court action was futile...
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Sounds like someone I worked for, he had a back up company registered and when he got into financial difficulties (spending company funds on his hobbies
) he folded the company and sold the assets at a knock down price to the back up company.Apparently he had done this a couple of times before.
rcx132
Philip
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Yup. Unfortunately companies being incorporated just opens up endless possibilities for cheating. A lot of the cheating is illegal, but a company has no obligation to release it's details of operations or it's full accounts so no one can easily show what they are doing is illegal. So if your employer sold assets at sub market price, that is illegal as he did it for non commercial reasons that were of no benefit to the company that owned the assets, but how can you show it?Sounds like someone I worked for, he had a back up company registered and when he got into financial difficulties (spending company funds on his hobbies
Apparently he had done this a couple of times before.
Kent
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Oh hang on a minute I don't think that sort of thing is allowed.? You can't just remove one share holder and restart.
I think they ain't much idea what they are going to do at present by the sound of it. On the upside they don't want it to go. As an employee the government gives an underwrite of a poor wage level for any money the paye looses. Its definitely not very high and doesn't take into account your normal basic or overtime.
The fd has walked either because he knows it's not viable or because he has been operating beyond his level and truly dropped a clanger - anyone's guess really !
The good news is sometimes insolvency really can fix SOME businesses by removing mistakes. Becoming an MD of a company doing the same work from the same premises that previously went bust under your watch though ? Probably not, the way to do that correctly would be to buy the other shareholders out without bankruptcy I feel.
Likely you could Google responsibility of company directors and qualification of a person to be a director
Kent
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You can't sell assets at a below market price.. The difficulty is in proving its below market value however with the power of Google or a call to a dealer your landed with fraud charges.
Company accounts are available for any Ltd company from companies House as is list of directors. No point getting them if you can't understand them though
Some rules change it used to give home addresses for each director it doesn't now for instance.
Company accounts are available for any Ltd company from companies House as is list of directors. No point getting them if you can't understand them though
Some rules change it used to give home addresses for each director it doesn't now for instance.
rcx132
Philip
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It's not allowed. That shareholder could show a link between the old company and the new company. If the new company is doing the same business using the same resources (same address, staff or same whatever) then in the eyes of the law it's the same company and he can recover his losses. This is a law designed to prevent exactly this kind of thing. The MD is also doing something illegal so the shareholder that's being pushed out can also now make a claim against the MD directly and for that claim the MD will now no longer be protected by the companies limited liability, so he can loose his house etc.
Wightsparks
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AFAIK - From a staff point of view if the company is phoenixed - ie closed and re-opened under a different name, if you carry on with the same jobs you are TUPE'd across and you lose nothing under TUPE regulations. - So you would keep your time served for statutory redundancy, all contracted obligations of the company, accrued holiday etc.
If the company closes without enough money to pay redundancy the govt has you covered on that - but only statutory redundancy not any enhanced deal you may have.
If the company closes without enough money to pay redundancy the govt has you covered on that - but only statutory redundancy not any enhanced deal you may have.
The pecking order in not the insolvency practitioner at the top, first it is any essential suppliers who are prevented from terminating services due to insolvency, then any contracts the administrator entered into, then the administrator then any secured creditors (minus the prescribed part which is a cut of the money reserved for unsecured creditors), then preferential creditors (typically employees), then unsecured creditors. HMRC is at the bottom with the other unsecured creditors.
TUPE provisions depend upon how the company is sold out of administration, if it is a pre-pack then TUPE should apply, if it counts as a terminal sale it may not.
The administrator will investigate the directors actions including any asset disposals typically for the past 2 years to examine their conduct, normally you do not need to sell of assets, you leverage the company with bank loans then buy back the company with another bank loan so its wooden dollars. The administrator can force directors (and others) to produce accounts and attend to be questioned over their conduct.
Going through a pre-pack administration is not the same as removing a shareholder, essentially all the shareholders lose their investment and someone buys up a new company and hence becomes a shareholder in a new company that emerges from the administration with its debt wiped out (but the money paid for the company is then used to pay some money to the creditors of the old company) it is not illegal, the old shareholders will not have a claim and it does stink - but on the flip side, the administrator will only agree to it if he is confident it is a better situation that stripping the company and selling off the assets.
TUPE provisions depend upon how the company is sold out of administration, if it is a pre-pack then TUPE should apply, if it counts as a terminal sale it may not.
The administrator will investigate the directors actions including any asset disposals typically for the past 2 years to examine their conduct, normally you do not need to sell of assets, you leverage the company with bank loans then buy back the company with another bank loan so its wooden dollars. The administrator can force directors (and others) to produce accounts and attend to be questioned over their conduct.
Going through a pre-pack administration is not the same as removing a shareholder, essentially all the shareholders lose their investment and someone buys up a new company and hence becomes a shareholder in a new company that emerges from the administration with its debt wiped out (but the money paid for the company is then used to pay some money to the creditors of the old company) it is not illegal, the old shareholders will not have a claim and it does stink - but on the flip side, the administrator will only agree to it if he is confident it is a better situation that stripping the company and selling off the assets.
Revs1972
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Worked for a company that was going down the pan and they new it.
At one point they were asking me to phone up suppliers to get as much kit off them as we possibly could , so they could either sell it, or take it home for themselves .
So I did as they said, I phoned the suppliers , but told them not to let anyone have anything cos I think the companies going to go pop.
Made a couple of calls and later that afternoon handed in my notice, took the rest of my holiday entitled and started new job the following week.
My advice to you, If you can get out, do it now, before all of you are on the dole and looking at the same jobs.
If they pull through , you can always go back if you leave on good terms.
Oh, and if someone promises they will pay you, take it with a pinch of salt
At one point they were asking me to phone up suppliers to get as much kit off them as we possibly could , so they could either sell it, or take it home for themselves .
So I did as they said, I phoned the suppliers , but told them not to let anyone have anything cos I think the companies going to go pop.
Made a couple of calls and later that afternoon handed in my notice, took the rest of my holiday entitled and started new job the following week.
My advice to you, If you can get out, do it now, before all of you are on the dole and looking at the same jobs.
If they pull through , you can always go back if you leave on good terms.
Oh, and if someone promises they will pay you, take it with a pinch of salt
Kent
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If you did as asked it would be a criminal matter not a civil one . Disgusting of them but I know someone who was taken for thirty K by a well known company doing exactly this .
Revs1972
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To be honest, I didn't even consider whether it was criminal of civil . Either way it was out of order and there was no way I was going to do it , and no way I was going to let anyone get stung.
All sorts of things came out over the years after it went pop, including they were running it insolvent etc. Shame , as when it was going well , it was producing some quality work for some big projects. Unfortunately the directors greed got the better of him and he liked to live the highlife. Downside was the monthly DD's killed it when there was a very quiet quarter with hardly any work .
The only person I didn't feel sorry for was the parasite from the finance company who liked to talk him into buying the latest kit, including sub arcs, vans , jags, hiabs etc .
I must admit , it taught me a valuable lesson on how to run a business and that's certainly not the model I follow. Always pay my suppliers , subbies etc on time ( fortunate that my clients pay 50% up front ) so the only person who will ever get stung would be me if the balance didn't come through ( never happened so far -touch wood). Turned down loads of work in the past year for new clients , and so far my gut feelings about people have turned out right when they haven't paid people in full (its a small world and you usually find out who got the job )
All sorts of things came out over the years after it went pop, including they were running it insolvent etc. Shame , as when it was going well , it was producing some quality work for some big projects. Unfortunately the directors greed got the better of him and he liked to live the highlife. Downside was the monthly DD's killed it when there was a very quiet quarter with hardly any work .
The only person I didn't feel sorry for was the parasite from the finance company who liked to talk him into buying the latest kit, including sub arcs, vans , jags, hiabs etc .
I must admit , it taught me a valuable lesson on how to run a business and that's certainly not the model I follow. Always pay my suppliers , subbies etc on time ( fortunate that my clients pay 50% up front ) so the only person who will ever get stung would be me if the balance didn't come through ( never happened so far -touch wood). Turned down loads of work in the past year for new clients , and so far my gut feelings about people have turned out right when they haven't paid people in full (its a small world and you usually find out who got the job )
Kent
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People often forget no matter how well your doing the monthly break even can take you under from a bad quarter that might just be external market blip. After around 25 years on my own I have seen these blips many times and they are always followed by boom times in demand and removal of silly people with big ideas and small pockets.
A friend works as management for a real big firm they buy everything outright up front I bet its saved thier bacon a few times in those blips
Start small grow big is much better than start big end small, go bust!
The firm I did my time at went bust a few months ago it had existed from the 1800s..ruined by a couple of big shot idiots who bought it and borrowed too much. Spent too much
rtbcomp
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I always paid my suppliers cash with order and I owned my own freehold workshop, that way if I had gone bust I could start a new business and approach the same suppliers. I never understood why people borrow or lease when they could afford to buy. They say it's tax deductible, but not at 100% it isn't!
Matrixx
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if its going to insolvency then it will have to pay all its debts as much as it can , possible strike a deal with the bank and struggle on, or if limited possibly be closed down and struck off. either way its likely to go pear shaped at some point. you can see what's happening on companies house. in my experience the HMRC can do whatever it wants it has virtually unlimited powers, but it wont close a company down if it thinks it can get some money back.
addjunkie
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I was once on jury service,( done it twice now) a guy going bump getting goods etc , running a company when disqualified etc, the other time was GBH.
The fraud case about the director was actually quite interesting, but very very complex web of lies, deception, dodgey dealing, much of whats mentioned above. He got sent to the big house in the end.
From that I learnt.....Look after no1, go find another job, the employee is just someone else they will con.
The fraud case about the director was actually quite interesting, but very very complex web of lies, deception, dodgey dealing, much of whats mentioned above. He got sent to the big house in the end.
From that I learnt.....Look after no1, go find another job, the employee is just someone else they will con.
Kent
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When my wife worked for practice rather than industry she used to put it like this.
VAT can carry machine guns without asking anyone but the cops need it authorising, extreme but puts the point across that British governments care more about thier cut than any other trivial matter of mear policing
Its true BTW no kidding
The reason is they do not want to take on any risk - if you go bust in that situation you personally would lose out on a lot of money, if you had everything on finance with a big bank loan and pay suppliers in arrears then if you went bust you would not lose much, the banks would take any money and your suppliers would all take a big hit. This is what a lot of big companies do to shift the risk from their holding / parent companies onto the supply chain.
I fully agree with you, something should be done about these companies that take out huge loans to buy up other companies, transfer the debt across and then use the debt to pay no tax. In reality the purchasing entity is taking no risk, avoiding paying tax and transferring the risk of their actions onto the supply chain - they benefit and a lot of other people lose out when the inevitable happens.
