Sub contracting - inter company invoices

[Cpt Morgan]

Hello,

Can anyone advise if it is a legal requirement to provide inter company invoices if "Company A" sub contracts work to "Company B", when both companies are owned and directed by the same people?

In this case Company B has gone into liquidation, but advise given by the liquidator dealing with this liquidation, is that despite being advised (legally) that Company A was sub contracting work to Company B, they (the liquidator) have not been provided with any inter company invoices.

Given the creditors (of Company B) would have been due money from that sub contracted work, and given no CIS declarations/ payments have been made and as no invoices have been provided, does this constitute wrongful and or illegal trading by the directors of Company A / B

Thanks in advance.

[Cpt Morgan]

Can anyone advise here please

[atticus]

I don't think that providing invoices can be said to be a legal requirement, but one would expect to see some form of paper trail. There may be some form of directors' misfeasance for a liquidator to look into.

Has the liquidator used his investigative powers under s236 Insolvency Act 1986?

[Cpt Morgan]

Not sure. Is this something I can ask or find out. Thanks

[atticus]

Yes. It is something you can ask or find out.

The best person to ask would be the liquidator!

[Cpt Morgan]

I did mean aside from asking the liquidator directly. It would seem from reading the complications of exercising S236 or indeed S234, that there really are no incentives for the liquidator to use these powers due to costs. The whole process seems thwarted with legal loop holes and money grabbing legal systems, effectively providing ways to allow those that owe money, to avoid paying, by making the process of proving those debts to expensive. It’s ironic !

[atticus]

Exactly. It is like rain on your wedding day, or a free ride when you've already paid.

UK insolvency law is fine in theory, but beyond that very rarely achieves anything for unsecured creditors.

I think I have previously mentioned the wisdom of managing risk, good credit control etc.