Is it possible to sue the individual of a company without suing the company itself to recover money owed? The company in question have ceased trading due to debts and no doubt the company will have no assets.

Moved to the Legal Forum.

This is dependant on whether the company was limited, in which case the answer in MOST CASES is no.

However, if the company was run by a sole trader you may have a slight chance, however if this was the case and has now ceased trading, success would be dependant on the level of assets of the comapny owner and of course the number of priority debts or secured debts outstanding.

who is the company in question?

The company is Ltd. I've successfully lodged an objection with Companies House to prevent the company from dissolving at least on their register. Will this improve my chances of recovering the money?

(Not sure it is wise to disclose the name of the company online)

The company is Ltd. I've successfully lodged an objection with Companies House to prevent the company from dissolving at least on their register. Will this improve my chances of recovering the money?

 

(Not sure it is wise to disclose the name of the company online)

Is the money owed for goods/services supplied to them or a loan?

Unless the Directors have been acting unlawfully you cannot touch them, that's the whole point of a limited company!

Sorry, but I don't fancy your chances.

The money owing is the deposit which the agent collected directly from the tenant but failed to give to the Deposit Protection Scheme. I've since paid the DPS the money so my tenant's money is safe, but of course I want the money back from the agent.

Surely the company/director has acted unlawfully here?

It would seem so. Do you know if the company is subject to any kind of insolvency proceedings? If the company is placed into administration or creditors' voluntary liquidation, the appointed liquidators are obliged to prepare a report on the conduct of the directors and lodge it with DBIS (the former DTI) within 6 months of their appointment. Queries such as yours would be dealt with under such a report. However, please be advised that these reports are 100% confidential between the administrator / liquidator and DBIS - the outcome is never divulged.

If someone petitions for the company to be wound up (a compulsory liquidation via the courts which can take up to 4 months or longer to occur) the Official Receiver ("OR") will be appointed and he will deal with issues relating to the directors' conduct. If there are potential assets the OR will hand the case to an appointed liquidator, if not, it will be dealt with by the OR's office.

Hope this is of some assistance!

I'm going to call the IPA tomorrow to find out if one of their members has been appointed. I don't know if it's a legal requirement for a company to employ one so I guess if not, there won't be one. But I need to find out.

I will contact the DBIS tomorrow and see what they advise.

I think even if I don't get the money back, the least I can do is report this con artist to the relevant authorities to reduce the chances of him doing something like this again.

Insolvency Practitioners are regulated under other bodies too, so your best bet is to keep monitoring Companies House (liquidators / administrators are obliged to file notice of their appointment with Companies House.

If a company is insolvent an accountant will normally advise a director to seek the advice of an IP - it's not a legal requirement for a company to employ an IP but if an accountant has advised them that they are trading insolvently a director would do well to act on this advice.

I am not certain that DBIS will be able to act until a formal insolvency procedure has begun, and even then they would not speak to anyone about their findings.

The director should have your details if you are a creditor, so chances are if he has contacted an IP you will be contacted anyway.

I'm not holding my breath for a letter from an IP. Although I know that their business account is still active and Companies House have agreed to keep their business active on record, a full six months have passed since the company stopped real trading and in the last few weeks, the company has removed its website, cut its telephone lines and closed down its emails accounts. They never answer their mobile. It's quite clear they want no contact.

After doing some more research, I've discovered that the agency snatched my tenant's deposit at the same time they had already taken action to wind down their business. I did some enquiries with Prime Location, Right Move and other advertising outlets who told me the company had stopped paying their subscriptions at the beginning of the year. Does this suggest that the the company were 'trading' at a time they were insolvent. Is this in itself unlawful?

I wish I could find a way to sue the individual or even a way to penetrate the so called veil of incorporation.

If they were your agents and collecting the monies on your behalf I think that they are s'posed to keep it "on trust" for you. Ie, you would get first dibs on the money rather than having it shared out to all the creditors. I would definitely write to the insolvency practicioner (if there is one) to stake your claim.

If they were taking money when they knew they were going insolvent then I think this is "wrongful trading". You need to check the insolvency act and the offences a director can be personnally accountable for.

I know for a fact that this company definitely pulled the plug on their advertising with the major rental portals at the same time they took the money from the tenant.

Even with this evidence of wrongful trading, how can the directors of this company be brought to account if their defunct company has no assets?

I'll have a look at the insolvency act.

I know for a fact that this company definitely pulled the plug on their advertising with the major rental portals at the same time they took the money from the tenant.

 

Even with this evidence of wrongful trading, how can the directors of this company be brought to account if their defunct company has no assets?

 

I'll have a look at the insolvency act.

I have come very late to this thread. Exactly the same thing has happened to me. I want to sue a company because of illegal actions by one of the diractors. The civil court has ruled in my favour that the company owes me the money but of course the company ( with its sole director ) have not paid up. I am in the process of getting my solicitors to issue a winding up petition and I am hoping the official receiver will identify the director as having acted illegally. I have also been to the police but they are not interested in persuing the director because they tell me it is in the hands of the civil courts and they are not debt collectors. My case sounds very similar to yours. He was the dirsctor of a property management compant who kept the deposits and rent from my tenants. Can you let me know how you have got on with your case. ( It may even be the same man we are talking about )

Kevin Jones

Thanks for your message. You're wondering if we're dealing with the same person. Is the director's first initial 'F'?

Thanks for your message. You're wondering if we're dealing with the same person. Is the director's first initial 'F'?

No. Afraid not. The limited company is a property management company registered in Bolton. They have one director. I would love to get to him but it seems things are stacked in his favour by the corporation veil. I am hoping that when the winding up petition is agreed, the official receiver will take things further. To be honest, the money I lost is not the big issue. The main thing that gets my goat is how he seems to be getting away with criminal actions when he is a nasty little fraudster. I have almost made it my mission now to make life difficult for him in the future even if I end up out of pocket. I was just struck by how similar your story was to mine and I am desperate to know if you got anywhere with suing the person who defrauded you.

Kevin

I got my money back after a colleague in the company decided to pay off the debt. I was lucky because the chap in charge had no intention of settling up and disappeared. Your best bet is to contact the local trading standards and council where the company was originally set up (not where you live). They may have a case against him for fraud. This was the case with the chap who ripped me off. You won't get your money back but you can potentially help to expose the man behind this bogus property management company.

Thanks for the advice. I am in the process of writing to the Trading Standards people. I will let you know how things progress.

Kevin