Liability passing from sole trader to Limited?

[Starfish9999]

Hello!

I had a contract with a business operated from a sole trader and he breached my contract in 2023. This year the sole trader incorporated a Limited company using the same trading name.
Do I now sue the sole trader or the Limited Company, and does the liability pass on from the sole trader to the limited company?

[Pezza54]

Hi
How did you resolve the problem with the defendant's name as per your thread started 13 August 2024. Did you just write to the court or make an application?

Your claim is against the entity you contracted with, the sole trader

[atticus]

Your claim is against the entity you dealt with. From what you say, this is the individual sole trader. Liability does not pass.

[Starfish9999]

Hi
How did you resolve the problem with the defendant's name as per your thread started 13 August 2024. Did you just write to the court or make an application?

Your claim is against the entity you contracted with, the sole trader

Sorry, I just responded to you in the other thread. I had not seen your response earlier. I filed an N244 application and asked to add the name of the sole trader to the business name that was already on the court file.

[Starfish9999]

Your claim is against the entity you dealt with. From what you say, this is the individual sole trader. Liability does not pass.

Thank you.

Do you know if it is ok for the Limited company, that was incorporated thereafter, to respond to the claim?

[atticus]

The defendant should respond.

Is there more context to your question?

[Starfish9999]

The defendant should respond.

Is there more context to your question?

Thank you for your reply.

Yes, there is more context:

I had the contract with the sole trader who used a trading name for his business. This business relationship started in 2020 and ended in 2021.
In 2022 the sole trader set up a limited company.
I sent a letter before claim in 2021 and early 2022 (before the limited company was incorporated) and filed the claim in 2023.
The Defendant engaged solicitors and they say they are instructed by the limited company. This limited company was set up after my contract with the sole trader ended, and after the solicitors responded to my letters before claim, but before I had filed the claim in court.

I understand that liability does not pass, and the sole trader is still responsible for my financial loss.
But is it ok if the limited company responds to my claim as the Defendant? One of their directors filed a witness statement and said that he was a director of the Defendant, but he could only have become a director after my contract with the sole trader came to an end.

Could the sole trader instructed the limited company to respond to my claim? They could act as an agent to the sole trader.
But could they act as the Defendant?

[atticus]

You need to point out that your claim has been brought against the individual and not the company.

[Starfish9999]

Thank you very much for reading my post and replying.

Well, I actually made the mistake of suing the trading name - because the contract did not state the sole trader's name.

To make matters more complicated they responded to the claim from a dormant company (they had set up a LLP that had always been dormant in 2021).

I figure that they wanted me to sue a dormant company so that I could not make them pay.

But the solicitors say that they were engaged by the dormant company - which is not possible I guess, as the company was dormant.
And witness statements came from "directors of the Defendant" - which could only mean the active limited company (dormant companies don't have directors).
In truth, it must have been the sole trader that always instructed the solicitors and paid for them, given that the limited company was set up after we started engaging in pre-action correspondence (and they already had engaged solicitors).

I just wonder if it can be correct that the solicitors were engaged by either the limited company (set up after pre-action correspondence had commenced and information had been exchanged) or by the dormant LLP? Would this be possible?
Or did they just tell a fib?

[Pezza54]

In post 1 OP stated the company was incorporated this year. I am not sure how OP has determined the company is dormant. The date for filing the first set of annual company accounts will not have been reached. I suspect the register states Active. I have seen "active" companies on the register that have submitted annual accounts for 20 years with no activity during that time

Unfortunately OP made the mistake of claiming against the wrong entity. The defendant, the incorporated company, employed a solicitor to defend the claim. Nothing wrong with that

OP needs to apply to court to obtain the court's permission to substitute the defendant, so proceedings can continue again with the sole trader as the defendant

[Starfish9999]

In post 1 OP stated the company was incorporated this year. I am not sure how OP has determined the company is dormant. The date for filing the first set of annual company accounts will not have been reached. I suspect the register states Active. I have seen "active" companies on the register that have submitted annual accounts for 20 years with no activity during that time

Unfortunately OP made the mistake of claiming against the wrong entity. The defendant, the incorporated company, employed a solicitor to defend the claim. Nothing wrong with that

OP needs to apply to court to obtain the court's permission to substitute the defendant, so proceedings can continue again with the sole trader as the defendant

Thank you very much for your response.

The LLP that responded to the claim is dormant, this was confirmed in a witness statement and I contacted Company House who confirmed it was registered as dormant/inactive.

I made an error in my original post - instead of 2023 it should have read 2021. Apologies for the confusion.

So essentially - the dormant company could not have engaged the solicitors, the sole trader must have done, right? And he obfuscated his identity by pretending that the dormant company responded to the claim?

I did not claim against any entity, as I sued the business name. There are several entities trading under this name now, but when I signed the contract it was only the sole trader.