Company Secretary liabilities

[suvin50]

Hi

I am not sure if anyone can help with this, but here goes.

Before she divorced, my daughter was company secretary for her husbands company. it was a one-man limited company with the husband as sole director. My daughter resigned as secretary in October 2014, before her divorce. The company was struck off in October 2016.

She has just received a letter from his solicitor stating that she is liable for half the company debts, which are about £35,000, mainly to the taxman.

Any help will be appreciated.

[EXC]

Re: Company Secretary liabilities

If she was only the company secretary and not a director I can't see how she'd be liable.

[Diana M]

Re: Company Secretary liabilities

Before she divorced, my daughter was company secretary for her husbands company. it was a one-man limited company with the husband as sole director. My daughter resigned as secretary in October 2014, before her divorce. The company was struck off in October 2016.

She has just received a letter from his solicitor stating that she is liable for half the company debts, which are about £35,000, mainly to the taxman.

Did your daughter sign any personal guarantee for the company?

Or was the marital home offered as security (if it was owned by them both in joint names) ?

I signed over my home to my (now ex) husband and I wasn't a company officer. I was simply blinded by love at the time which costs me many many thousands to escape at a later a date when he put the company into voluntary liquidation, but that's a different story. This is about you not me

If they got divorced in 2014 was there a formal financial 'conclusion' on who would be responsible for what?

Does the marital home still exist and who lives there if it does?

Why was the company struck off?

Was your daughter on the payroll as an employee (Company Secretaries often are especially wives) and if so for how many years (I'm picking up on your reference to tax issues).

Sorry for all the questions but it's necessary if you want help for your daughter.

Di

[suvin50]

Re: Company Secretary liabilities

Hello Di
Thanks for your input.
There was no personal guarantee as the company was a service company with no initial outlay and minimal running costs.
When he left he made no contribution to the mortgage in the 10 months until the house was sold. There was £55k left after the mortgage arrears were cleared and the arrangement was that he would get £22k with the balance going to my daughter, However he refused to accept the £22k and the money has been held in escrow.
My daughter was never an employee.
The debt to HMRC would have been Corporation Tax, PAYE, NI and possibly VAT.
The reason for the strike off are unknown.
The proposal in the solicitors letter is that the daughter coughs up £25K and the ex £20k

[Diana M]

Re: Company Secretary liabilities

The reason for the strike off are unknown.

Go to the Companies House BETA website to establish the reasons for the strike off and the full history of the company's affairs. The PDF downloads are free > https://beta.companieshouse.gov.uk/

From what you say there appears to be some 'unfinished business' in regards to the divorce financial matters.

Did your daughter have legal advice/representation in relation to her divorce settlement at the time?

Di

[Joanna C]

Re: Company Secretary liabilities

Was your daughter a shareholder?

[suvin50]

Re: Company Secretary liabilities

I have already checked companies house. There are no details on the entries just one line saying that the company has been dissolved.

My daughter did have representation and it is her solicitor who is holding the money. The ex asked for £22k and that was agreed but he is refusing to sign the settlement papers.

[Joanna C]

Re: Company Secretary liabilities

If she was only the company secretary and not a director I can't see how she'd be liable.

HMRC can in certain situations. Also If it was a service company they may have drawn dividends which could be deemed illegal (and repayable) if there were insufficient profits.

Officers of a company include directors, company secretaries, shadow directors, and managers.

Personal Liability Notices are issued by HMRC when there is sufficient evidence to show that a company’s failure to pay the correct level of NICs/PAYE was due to the neglect or fraud of an officer of the company. If a company is in liquidation, this may not stop HMRC investigating as the liquidator or official receiver can be asked to allow access to the company’s books.

[suvin50]

Re: Company Secretary liabilities

Yes, she was a shareholder

[Joanna C]

Re: Company Secretary liabilities

I thought as much. You said in an earlier post

" The debt to HMRC would have been Corporation Tax, PAYE, NI and possibly VAT."

See my response in post #8. Given the amount being claimed I would suggest your daughter takes advice from an accountant as to whether she is liable or not.

[suvin50]

Re: Company Secretary liabilities

She was a shareholder but never received any dividends.
The last annual return was in November 2014 so that was perhaps why the company was dissolved. It was still trading until March 2016 when he formed another company

[EXC]

Re: Company Secretary liabilities

HMRC can in certain situations. Also If it was a service company they may have drawn dividends which could be deemed illegal (and repayable) if there were insufficient profits.

Officers of a company include directors, company secretaries, shadow directors, and managers.

Personal Liability Notices are issued by HMRC when there is sufficient evidence to show that a company’s failure to pay the correct level of NICs/PAYE was due to the neglect or fraud of an officer of the company. If a company is in liquidation, this may not stop HMRC investigating as the liquidator or official receiver can be asked to allow access to the company’s books.

Sorry I didn't make myself clear, she has no liability to her ex husband. As I understand it she's not received a PLN from HMRC but it sounds like he might have done and if so liability must rest with him.

[Diana M]

Re: Company Secretary liabilities

She has just received a letter from his solicitor stating that she is liable for half the company debts, which are about £35,000, mainly to the taxman.

The proposal in the solicitors letter is that the daughter coughs up £25K and the ex £20k

I would think that the first thing your daughter needs to see is evidence of the HMRC £35k debt with a full breakdown as to how that figure was arrived at. Did your daughter play an active part in the company such as dealing with the pay roll etc?

Either the solicitor is rubbish at maths or his letter may also refer to the unresolved divorce financial matters which could be intertwined (in his mind/file).

Which solicitor is holding the £55k from the sale of the marital home?

You say the "arrangement" was her ex husband would get £22k from the sale. What kind of arrangement was that? Maybe a Mediation settlement?

he made no contribution to the mortgage in the 10 months until the house was sold. There was £55k left after the mortgage arrears were cleared and the arrangement was that he would get £22k with the balance going to my daughter, However he refused to accept the £22k and the money has been held in escrow.

Di

[suvin50]

Re: Company Secretary liabilities

£22k was the amount that he said he wanted.
She did not have anything to do with the running of the company, she was basically a nominee when the company started trading in 2001.
In the last annual report in 2014 there are listed debts of £34k, if I am reading it correctly.

[Diana M]

Re: Company Secretary liabilities

£22k was the amount that he said he wanted.

So there wasn't an "arrangement" as such. He said he wanted £22k then changed his mind.

I've asked which solicitor is holding the £55k in escrow. If it's your daughter's ex husband's solicitor, then he may be looking for ways to 'spend' it in order to reduce the amount she will eventually get. That's pure speculation from a divorcee not a legal assumption

What plans are there in the pipeline to sort the divorce finances? Surely one of them has to make the next move, or is this latest demand the next move?

Di