Caveat / loophole in small claims court

[justiceman]

If taking a limted company to small claims court, is it possible for the director to disolve the company and then open up a new one to avoid paying the claim?

If so is there a caveat that can be written on the summons stating words to the effect of " XYZ Ltd or in the event of company closure, any subsequent company created by Director (NAME) or opened in the name of (director) spouse / family members"

Many thanks

[ostell]

If the company try that then you keep an eye on the Company's Hose records and object when they try and dissolve.

[2222]

There is nothing you can do about this. It happens ALL the time. That is precisely why some people set up limited companies, I'm afraid. It's almost impossible to pierce the corporate veil. Has the director deliberately defrauded you, or has he done the job, but rather poorly?

Any chance you paid by credit card?

You can stop the company being dissolved, but will that help you if there's no money in it?

[ostell]

Because if the directors try to move money out of the company illegally or with the aim of not paying debts then you may be able to take action against the director.

[justiceman]

Thanks, I am guessing it takes longer than a few hours to disolve a company so my best bet is to check the public record for any such activity and then submit an objection as a creditor?

I am taking the company to court under the consumer rights act 2015 for not refusing to repair faulty goods that where sold to me.

[2222]

It depends how big your claim is in relation to the size of the company. If your claim is tiny, they won't bother with any of this. If your claim is large, it is easy for them to start a new company as soon as your claim comes in and direct any new business to that company.

They can continue paying staff/directors in the old company etc. They can also pay for materials/sub-contractors from the old company. Some of this may be legit and some fraudulent, but you won't have access to the records to prove any fraudulent activity. Your claim, if they defend it, will take several months to come to court, and they can siphon a fair bit of money out of the company over that time.

If you, as one of the main creditors following a successful outcome to your court case, appoint a liquidator for the company and fund the liquidator to the tune of a good few £,000s, he might investigate effectively and find fraud. It depends how clever the directors are at making it look legit.

Can I ask how much you are claiming?

[justiceman]

I am claiming for £3500

[2222]

Ouch! And you paid none of it by credit card?

[justiceman]

No - I am claiming through the scottish small claims court. I believe the limit is £3000 but the website says for claims upto £5000 after the 28th November to use a simple claim form. Take it the limit is rising to £5000 on this date?

[des8]

The simple procedure for small claims upto £5000 commenced on 28 November 2016