Bankrupt-opened new business next day???

mrs_baggins

How is it possible for somone who owes creditors hundreds of thousands of pounds to divert all there assets and money into their partners name so when the original business fails it just doesnt have any effect on them and their lifestyle carries on exactly as before leaving all the peple they owe money to seriously out of pocket.?

I guess that bancruptcy is just against one personand not his partner/wife but surely his bank accounts will be looked at to see where all the transfers of money have gone to.

I dont want to go into details but I foundout that someone who owed a friend lots of money did just this and I am sure it goes on all the time and probably nothing can be done about it butI said I would try to find out something.

Lost2

When the OR looks at he's Bank account he will ask questions
OR's are not fools

Gloomy_Past_Bright_Future

Unfortunately if it is a Limited Company bankruptcy as opposed to an individual bankruptcy, this is the pretty much the norm.

inmypocketnottheirs

Gloomy_Past_Bright_Future wrote: »

Unfortunately if it is a Limited Company bankruptcy as opposed to an individual bankruptcy, this is the pretty much the norm.

Not that I am splitting hairs but Limited companies do not go bankrupt, only individuals. Limited companies go into insolvency.

Gloomy_Past_Bright_Future

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors.

From wikipedia..

Not that I am splitting hairs.

If you are going to use the word insolvency you need to define the type of insolvency.
ie Cash flow insolvency or balance sheet insolvency. It is a term used in business.

Hope that helps

Have a good day.

inmypocketnottheirs

Gloomy_Past_Bright_Future wrote: »

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors.

From wikipedia..

Not that I am splitting hairs.

If you are going to use the word insolvency you need to define the type of insolvency.
ie Cash flow insolvency or balance sheet insolvency. It is a term used in business.

Hope that helps

Have a good day.

I think that you will find that is a US definition.

As we are in the UK, Ltd co's do not file for bankruptcy, they file for insolvency. Insolvency is when a company can not meet its obligations. Also under UK law a company that continues to trade when insolvent, the directors can be held personally liable.

There is a lot of misunderstanding about bankruptcy, and this is an example of this. However bankruptcy is a legal state, and one that only applies to individuals and not limited companies.

If GPBF had taken the trouble to research the wikipedia listing a little further he/she would have uncovered the following:

In the United Kingdom, bankruptcy (in a strict legal sense) relates only to individuals and partnerships. Companies and other corporations enter into differently-named legal insolvency procedures: liquidation and administration (administration order and administrative receivership). However, the term 'bankruptcy' is often used when referring to companies in the media and in general conversation. Bankruptcy in Scotland is referred to as sequestration.

kew63

An old boss I worked for did this a matter of course, one buisness would fail and up pop's the next. No idea what count he is upto now.
And no the staff didnt get any redundancy or notice pay !!

It's not right and should be stopped :-(

Lost2

kew63 wrote: »

An old boss I worked for did this a matter of course, one buisness would fail and up pop's the next. No idea what count he is upto now.
And no the staff didnt get any redundancy or notice pay !!

It's not right and should be stopped :-(

If am not mistaken,but dont company's now have to have liability insurance for just this. (If they go Bankrupt to pay there employees)

peachyprice

mrs_baggins wrote: »

How is it possible for somone who owes creditors hundreds of thousands of pounds to divert all there assets and money into their partners name so when the original business fails it just doesnt have any effect on them and their lifestyle carries on exactly as before leaving all the peple they owe money to seriously out of pocket.?

I guess that bancruptcy is just against one personand not his partner/wife but surely his bank accounts will be looked at to see where all the transfers of money have gone to.

I dont want to go into details but I foundout that someone who owed a friend lots of money did just this and I am sure it goes on all the time and probably nothing can be done about it butI said I would try to find out something.

Unfortunatley things are not always as they seem from the outside.

If the individual in question has gone bankrupt personally, this will not affect the business if it is a limited company, other than the fact that he would have to resign as a director of the company. Company assets belong to the company, not the individual, and would form no part of a personal bankruptcy.

On the other hand if a limited company has gone into liquidation, unless the individual has personal guarantees (which any savvy business person won't) it will have no effect on their personal finances and their assest will be safe from the collapse of the company.

The only exception would be if the business were a sole trader, or partnership, in which case the finances of the individual and the company would be more inextricably linked.

It is possible that there is nothing untoward at all, which will not be what your friend want to hear.

FraudBuster

Companies Investigation Branch

http://www.insolvency.gov.uk/cib/faqs.htm

inmypocketnottheirs

peachyprice wrote: »

Unfortunatley things are not always as they seem from the outside.

If the individual in question has gone bankrupt personally, this will not affect the business if it is a limited company, other than the fact that he would have to resign as a director of the company. Company assets belong to the company, not the individual, and would form no part of a personal bankruptcy.

On the other hand if a limited company has gone into liquidation, unless the individual has personal guarantees (which any savvy business person won't) it will have no effect on their personal finances and their assest will be safe from the collapse of the company.

The only exception would be if the business were a sole trader, or partnership, in which case the finances of the individual and the company would be more inextricably linked.

It is possible that there is nothing untoward at all, which will not be what your friend want to hear.

But a bankrupts beneficial interest (i.e. shares) in the ltd company could be included in the proceedings. All businesses have a value, and if the value was enough to interest the OR or was of significant enough value to satisfy creditors, then any such value could be deemed as part of the bankrupts estate.