Director Fiduciary Resposibilities

[Banks007]

Hello everyone,

I was hoping someone could provide me with some advise concerning a building directors fiduciary responsibilities, and how you can show they have been breached.

Would a failure to pay HMRC VAT/PAYE constitute one such breach, and therefore render the director/s liable for associated company debts personally? (This can been shown by recent publications at companies house).

Or would a failure to act toward a client using reasonable care be another example, or taking cash payments and not providing industry standard certifications, and or working to building regulations requirements, or those set out by the structural engineer.

Also is anyone able to comment on whether a Limited company (Company A Ltd) is able to subcontract work to another company they own (Company B Ltd - which is in liquidation), using
payment applications (indicating VAT at an apparently discounted 5%) under a name (C - so i assume a "trading as" name) with no indication of a link to either Company A Ltd and or Company B Ltd, then invoice under Company A Ltd ,with the same total including VAT at 20%!!? I am confused.

Also Company A Ltd seems to now be implying they are Company D Ltd, according to new websites, but the name "Company D Ltd" is already registered at companies house.

They are also now using a new "trading as" name (E) with the same old website wording as implied under content shown for "C", so just reinventing themselves yet again, I suspect for when Company A Ltd also goes into liquidation, so they have yet another fall back position.

Any help much appreciated or any other indications which may render the director/s personally liable would be appreciated.

[echat11]

Hi Banks

Welcome to LB

Here's some information - https://companieshouse.blog.gov.uk/2...pany-director/

[Banks007]

Hi Banks

Welcome to LB

Here's some information - https://companieshouse.blog.gov.uk/2...pany-director/

Hello and thanks for this, much appreciated.

I note with interest a couple of points made here;

(1) If the company becomes insolvent, your responsibilities as director will apply towards the creditors, instead of the company. A creditor is anyone owed money by the company.

Given the associated company (in my case Company B) that was subcontracted to complete work on behalf of Company A, became insolvent during my project, but I was not informed, and given the directors have been noted by the liquidators as not responding to questions associated to theirs debts, with under value transactions selling i.e. Company B assets to Company A etc, would this be considered a fiduciary breach?

(2) Acting with reasonable care

Given Company A (and indeed Company B has claimed in the past) to have over 30 years worth of building experience, have they also breached their fiduciary responsibilities to me as a client by not completing my build to building regulations and or the plans provided by the structural engineer?

I am hoping to hold the directors personally liable for piercing the corporate veil, and I believe one way of doing this is proving failed director fiduciary responsibilities which I can very easily substantiate.

Again any help much appreciated

[echat11]

a) If you are a Creditor then they should be acting in your interests.

b) For whatever reason they aren't operating and have left projects unfinished etc, so I'm not sure the can be directly accountable in the way you suggest.

I would contact several specialist solicitors who specialize in director breach of duties (they are out there), some might offer a free initial consultation.

[atticus]

The kind of laws that are available are wonderful in theory, but a total waste of time in practice. The procedures and processes are cumbersome and hugely expensive. The Insolvency Service or a liquidator may take some action, but whether ordinary unsecured creditors will ever see any benefit is hugely doubtful.

You should concentrate on proving your claim against the company that you dealt with and do not get sidetracked into things that are great in theory but a nightmare in practice.

NB when there are several companies involved, changes of name etc, the company registration number is the unique identifier. That never changes, so track the company record at Companies House by its number.

I am sorry if I appear jaded and cynical. I worked in this area of law for several years, before moving on when I became disillusioned.

[echat11]

I have to agree with ATTICUS, if The Insolvency Service can deflect and do nothing they will, they need stuff sign posted, but still won't get it.

[Banks007]

Hi all thanks for your comments.

Company A, sub contracted to Company B, whilst Company B was very clearly in liquidation, so I guess my basic question is, are they allowed to do this?

[atticus]

That certainly raises questions, but more information is needed.

[Banks007]

That certainly raises questions, but more information is needed.

Hi, What info would be useful?

I can show via an number of emails that Company B was still working on my property, and have court documents that show Company A quite clearly stating that Company A sub contracted work to Company B throughout my project, with the emails sent to me clearly coming from Company B email addresses

Also Company A clearly knew that Company B were in financial difficulties well before they entered into liquidation, and continued to continue via subcontracted to work on my property.

Given work was subcontracted to Company B as per court documentation, I would therefore expect that Company A was paying Company B, and they should be able to show this and that in doing so if they did not disadvantage their creditors then I suspect only wrongful trading applies, but if they did not take payments from Company A, then this would be in effective fraudulent trading (Company B) as they deprived creditors of money taken for my project.

Happy to provide any other info to ensure this is clear.

[Banks007]

Hi,

If Company A sub contracts work to Company B (both owned by the same directors), are they expected to show payments from Company A to Company B in their accounts if Company A is the contract owner, and the one who is paid directly by the customer?

Thanks

[Banks007]

Not sure why you have started a new thread for this as it appears to be a continuation of your existing thread

Director Fiduciary Resposibilities - LegalBeagles Forum

But considering that is none of your business............

[Banks007]

Any payments would need to be accounted for; it is unlikely that you would see that level of detail in accounts filed at Companies House.

That bit is obvious, but I guess my question is would the accounts for Company A, or Company B, or both need to show these details within their accounts?

[PallasAthena]

But considering that is none of your business............

It is relevant to anyone reading this thread to know there is a backstory on your other thread.

[ULA]

As it is clearly causing issue for continuity for our advisers I have merged the two threads.

Banks007 please can you keep all questions related to your issue on the same thread for the ease of providing you advice. Many thanks

[atticus]

Any payments should be accounted for. But such accounting entries are highly unlikely to be shown in accounts filed at Companies House.

[Banks007]

As it is clearly causing issue for continuity for our advisers I have merged the two threads.

Banks007 please can you keep all questions related to your issue on the same thread for the ease of providing you advice. Many thanks

Now the flow doesn't make sense, cheers!!

[atticus]

It does if you read slowly and carefully. And stick to one thread on this subject.

Cheers.

[Banks007]

It does if you read slowly and carefully. And stick to one thread on this subject.

Cheers.

Atticus, I have noticed your replies on other threads, and note with interest how little content you really provide other than spouting great wisdom and knowledge but with very little if nothing at all to back up any of your comments, so please, save your breath, you clearly think you know more than you do. Cheers.