Retention of Title for a part paid invoice and agreed term

[francisthood]

I have a situation where I am invoicing for my time but the client can't afford to pay 100%, I have been advised that I can put an invoice in for say £1,000 and state that an instalment of £500 is now due. This is due to the client not having the cashflow.

This raises a few questions on how this would be represented as my understanding is the full amount should be lodged in the accounts and would therefore show a debt of £500 every time this situation would occur, this would mean debt showing on the accounts which would need to be recorded as such and would show on companies house when the accounts were filed.

An option which has been suggested is to invoice as above but not to actually show the shortfall in the accounts which would require a slight change of wording on the invoice, whilst the shortfall was still outstanding the title of the work would not be granted (Retention of Title). This would be in case the company went into liquidation so I could stop my work being used if they just opened up under another name to avoid paying me the backpay.

Does this approach work from a legal perspective i.e. if they did want to liquidate and set up again could I prevent them from using my work unless they paid me all what was recorded on the invoices despite it not showing in the accounts or would the only to protect me be to have the full amount recorded in the accounts?

[echat11]

Hi FRANCIS

des8 Can you please take a look and advise, many thanks.

[des8]

The accounting side isn't really within my ambit.
Regarding "retention of Title" I don't see that as being enforceable as such clauses need to be in place when the contract is set up.
It isn't possible to just add a clause to your invoice. For it to be enforceable a customer would need to sign it prior to delivery

[francisthood]

The accounting side isn't really within my ambit.
Regarding "retention of Title" I don't see that as being enforceable as such clauses need to be in place when the contract is set up.
It isn't possible to just add a clause to your invoice. For it to be enforceable a customer would need to sign it prior to delivery

Thank you for the response.

A little more background, we are just creating an SLA to work under as we can not be Directors (many reasons why not Directors) we are also creating the Shareholders Agreement and will be adjusting the Articles of Association for other aspects.

If I wrote into the SLA and Shareholder Agreement about the value being taken when the Company can afford it and each invoice referenced the current position, would this be something which would give some protection if the company were to go into administration. i.e. we are high on the priority list of being repaid our monies.
I also want this to put me in a position which will allow me to be able to increase my invoice amount over the coming months and years as the Company becomes more profitable.

Does this sound fair and would it stand up legally?

I also want the 'Retention of Title', I am wanting to prevent the company from closing and reopening and carrying on using their Website and all the marketing work which has been done but will not have been fully paid for.

[des8]

Sorry, but I can't help and don't know anyone on LB who might know
echat11 any ideas?

[echat11]

You might need to get professional advise as this is complex.
You could try ukbusinessforums as that site covers the subject matter more then we would ever do (for guidance).