Who is liable? Me personal or the company I signed on behalf of?

[fbnts]

Hi,

Me and a friend setup our own business back in 2003. We found a small office that we went for and everything was fine until we fell into problems and could no longer afford the property. We wrote to the landlord (we were in a 3 year lease) explaining the situation.

We moved out to a more affordable office whilst we tried to get back on our feet.

I then sold my shares in the company over to the other two directors and walked away to concentrate on another project.

It then turned out that I personally was liable for the council tax/Non Domestic Rates and lease as I had signed the lease.

The 1st page states:

<Name> of <Address>, trading as <Company Name> (“the tenant”)

however the final page I signed as
Name: <Name>
Title: Director

<Company> was a limited company so I could not have been 'trading as' this.

Does this mean that I would be the liable party personally or the limited company as a whole?

Hope this makes sense, its just that I have ended up with the liability orders for both the office since the company moved out and the flat above (The VOA office will not rate the property as a whole even though it was when we took out the lease) for just over 2 years of rates!

[stivis]

The Limited company is Limited Liability you signed on behave of the company not for yourself ..........If you sold the shares and left the company ...It is not your Liability . tell them they are not on .....and pursue the Limited company .......I got conned by Capital Bank out of £1500 on a similar ...........And I'm going to get it back

If you did not give a personal guarantee then it is nothing to do with you

[fbnts]

Ah great, I did raise this point with the council but their response was:

I have now recieved a reply from my legal section concerning the lease in resect of <Property Address>.

The legal opinion is that you as an individual are rsponsible under the lease. In law, an unincorporated association does not have the capacity to enter into a lease. This would apply to a trading name such as <Company Name> (as stated on the copy of the lease that you supplied). The actual tenant in law would therefore be yourself and not the trading name. I am therefore satisfied that you have been billed correctly and you are responsible for charges incurred up to the end of your lease.

But after reading this tonight I would agree that yes an unincorporated association does not have the capacity to enter into a lease, however, this was the fundermental point I had raised as I belived that I signed on behalf on an incorporated company and not an unincorporated association.

I have scanned the 1st and last page of the lease just to clarify. Where do you think I stand? If I am right and the company is liable then how do I proceed raise a court case against the council or stop payments and wait for it to be taken to Magistrates court and argue my defence there?

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Your help is most appreciated.

[dhoom]

My comments:

If you have a VAT registration certificate in the name of the LTD CO. or a bank statement that shows the LTD CO details, then I think you should send a copy to the council and say that the 'trading as' was just an error. BTW whose name was the council sending the invoice, if it was incorrect did you notify them?

[fbnts]

The council was sending the bills to that premises in my name as thats what the landlord had told them when we took the lease out.

It was after we moved out that I started getting the bills to my home address.

I will try and write back to them and argue this with them.

[stivis]

Must admit I still think you are not liable, but looking at the pages I have a reservation . However the "trading as" usually denotes a Sole trader or Partnership.and not a Ltd company and by accepting the signing as Director they knew that it was a Ltd company and not the others

[fbnts]

Well thats what I thought, the first and last page seem to contradict each other and wasn't sure which would overrule which (I bet the council will belive it is in their favour!)

Sending letter to council in morning and will let you know the response.

Tom

[fbnts]

Hi,

Just got a snotty letter back from council:

I refer to your letter dated 10th January 2007 regarding the above [address].

Your letter is almost identical to the one you wrote on 19th January 2006 and does not supply any new information.

I enclose a copy of my reply to you and a copy of your tenancy agreement. The tenancy agreement states the lease is between <Landlord> and yourself (trading as <Company Name>). It may have been your intention to sign the lease in the name of <Company Name> Limited but that is not what the lease states.

I obtained the opinion of the council's solicitor with regard to your lease and he was satisfied the lease was signed in your name, not a limited company name. In my opinion you have been billed correctly and liability orders have been obtained which means the court were satisfied that you were billed correctly. If you wanted to dispute the liability orders, you should have attended the magistrates court when a summons was issued to you.

I shall not be amending my records further and if you still dispute the fact that you have been held liable then I suggest that you seek independent legal advice on the matter and appeal to an independent tribunal at the following address:....

A few questions I have,
1. Could I legally trade as <company Name> when a <Company Name> Limited already existed?
2. Where can I seek legal advice? I cannot afford a solicitor and the Law Centre was not able to help.
3. How would the tribunal work?

Tom

[dhoom]

Hi Tom

Did you act on my post no.4

[fbnts]

I don't have any of these any more as I left the company and sold my shares back to the other directors.

However I have provided them the company number and date it was incorporated (about 3 months before we took the lease on).

Tom

[stivis]

1. Could I legally trade as Blue Box Technology when a Blue Box Technology Limited already existed?

Yes and No the no would be if the ltd company took action against you using the registed name
2

. Where can I seek legal advice? I cannot afford a solicitor and the Law Centre was not able to help.

Try Citzens Advise as you are an individual

[fbnts]

Thanks for your comments. I have CAB previously but they cannot take any more cases on at the moment as they are too busy.

Well I have found out that I need to make my appeal to the Valuation Tribunal. I contacted them and they sent me a form.

I have completed the form and sent them my case with a print out showing the date of Ltd company incorporation, the 1st and last page of the lease and the following:

I believe that I not the liable party for the property as I believe that I signed the lease on behalf of the limited company that I was a director of.

Chesterfield Borough Council’s position is that I signed the lease as an individual, unincorporated person trading as <Company>.

My defence to this would be:

.
a)The company <Company> Limited was incorporated on <date>. (Attachment A). The lease was signed on <date>, 3 months after the incorporation of the company. I would not be a Director of a Limited Company and also an unincorporated association with exactly the same name.
b)The cover page (Attachment B) detailing the two parties states “<My Name> of <address> trading as <Comapny Name>” which I believe was a clerical error and should have Limited or Ltd appended to the end to coincide with the correctly signed final page.
c)The lease is clearly signed (Attachment C) as Director, and as such an unincorporated body does not have a Director.
d)Whilst the property was occupied all lease payments and insurance premiums were billed to, and paid by <Company Name> Limited.
e)All utilities were in the name of the Limited company.


Attached is the letter sent to Chesterfield Borough Council and their response.

Further clarification can be provided on request.

Now I have found out that the council want a face-to-face hearing. HELP!!! how do these things work? Do I need to get a solicitor? I fear the guy from the council is going to eat me!

Tom

[stivis]

If you can get the details of
1) Limited company liability ...ie where their liability stops .It does not come near you as an indvidual
2) directors ability to sign on behave of a Limited Company
the second should sort the lot out
There was mention of the vat registration earlier , if you needed the certificate and can't get a copy .....write to the Customs and excise and ask following
could you please comfirm that the firm of XXXXXXX
A)used the name of XXXXXXXXX ltd
B)was registered for Vat in the period XXXXXXXX
To reinforce your case
Write to Companies House and ask the date you resigned from the company
that should give you written evidence.
send copies and keep originals safe ( but you knew that)

[fbnts]

Hi, thanks for that last post. for some reason I didnt see my thread had been replied to.

I will get the VAT confirmation and the details regarding my Directorship.

What do you mean about 1 & 2? Should I find out the exact text on how a Ltd company works?

I have the tribunal sometime in May.

Best Regards

Thomas Kirk

[fbnts]

Hi,

Just a quick update, I have a date for 30th May for my hearing.

Companies House have provided confirmation of my directorship but nothing back from Inland Revenue regarding VAT.

I'm gonna start drafting my case as I want everything to be right.

Will post it up here once I've got something started.

Tom

[basil010]

Hi, Sorry for the delay, but I have just read your case.
There seems to be quite a lot of advice going on here that is not quite correct.
Unfortunately you will have to look at how you signed the lease and in what capacity. If you were signing on behalf of the company you should have signed as:
Director, For and On behalf of (the name of the company) furthermore the name on the lease should have been the company name including the word Limited and the Registration Number.
There is legislation under section 351 of the Companies Act, that quite clearly states that if an Director or Officer of a Limited Company enters into an agreement for the supply or purchase of goods or services without disclosing the Limited status of the company then he is personally liable for any debts that are incurred by the company that they fail to pay.
It really is a matter of whether you signed the agreement correctly, as it would appear that the lease was made out as if you were running a business not a company in which case you will find it difficult to get out of it as you should have noticed it and had it changed.

[fbnts]

Thanks for the info.

Where would I get a full copy of the Companies act? I have googled and it has brought up a copy of one from 1989 but there's also mention of a version 2006. Which would my lease fall under now? It was signed pre 2006 so I would have thought it was the earlier version.

Tom

[calvi36]

Just a quickie here. If the council knew you were a newly formed ltd company then standard practise is to get a directors guarantee if the company has been trading for less than 3 years. What does surprise me is that you were never asked for any accounts if they viewed you as a sole trader or partnership, again standard practise in leasing. Just a couple of thoughts on the counter arguments.