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Pheonixing
Anonymo
Posts: 9 Forumite
Hi, I would like to know if anyone has any information to help me. I have worked with the same company for three years. It went into receivership during the first 6 months I was there - this was due to mismanagement, with the company director obtaining a lease purchase on a machine that was costing the company £25,000 per quarter, as the company only had a turnover of £250,000pa, it was destined to fail.
Then once in receivership, it was bought up by a man who practices pheonixing, buying companies at cheap rates with the staff and customer base already in place - in fact, he didn't even pay for the company, he used the company to pay for itself so he has put up no money whatsoever.
This man is the company's majority shareholder, along with one of his personal friends. There are two minority shareholders who have been with the company for 25 years between them, and have its best interests at heart - but they have no power over these other two men.
The two majority shareholders take money out of the business as soon as it has come in, before any of the employees have been paid and before the bills have been paid. They have not looked after the accounts at all and we now owe the taxman £7,000, while they have taken £14,000 that we have no information about; they may have taken it legitimately but they will not divulge the information to us as to where the money has gone. They have not paid the electricity bill, which comes to a further £8000.
They also own another company in the same industry in a different town. We always do jobs for them, using our resources (posting accounts, paper, machinery...) but we are never recompensed for the expense incurred. These people are going around the country buying up failing businesses in this area and simply pillaging them for as much as they can. Once the companies go bust, they are uncontactable for at least a year. One of them has stupidly shown me his current account balance and he has more than £300,000 which he claimed was from the sale of a house.
We have had three accountants hired, then fired as soon as they come too close to completing the books. We have three employees who are not on PAYE because these men will not sort it out. Their role in the company is to issue pointless orders that they then forget about, or get angry about once they cannot be done, thus giving them reason to fire people willy-nilly.
None of us has contracts so they can do what they want. Worse still, the company was originally a charity, we have people with learning difficulties doing all of the manual work, getting no reward- we are suppose to offer them training, but the majority shareholders always discredit every course suggestion we come up with. These shareholders have contributed nothing, they have brought in no new customers, but blame us for this, but we won't bring in new customers for them to take all the profit from our hard work.
We have just applied to a debt recovery agency to bring in outstanding money owed to us by our customers; we estimate this to be around £27000. We know as soon as it hits our bank account, it will be taken by the two majority shareholders, with no questions answered.
They appear to be running the company into the ground, they have bought several, unnecessary machines on lease purchase for 5 years, costing us £2000 per quarter, for no reason...these are the kind of decisions they have made.
We are the ones who understand the company and the industry, but we are not in control at all.
We would take them to court, but the company is about to go bust anyway and we'll be saddled with their debts (e.g. tax, NI, electricity & hire purchase).
Can anyone offer comprehensive advice on how to deal with this type of person?
We feel we can run the company better and have its best interests at heart, we will have a few teething problems as none of us has ever run a company ourselves. But, we want to create a good working environment that protects the vulnerable people in our charge and offers them the training and rewards they deserve. The majority shareholders are taking advantage of people with disabilities, but using the same disabilities as a focus point to market the business.
Then once in receivership, it was bought up by a man who practices pheonixing, buying companies at cheap rates with the staff and customer base already in place - in fact, he didn't even pay for the company, he used the company to pay for itself so he has put up no money whatsoever.
This man is the company's majority shareholder, along with one of his personal friends. There are two minority shareholders who have been with the company for 25 years between them, and have its best interests at heart - but they have no power over these other two men.
The two majority shareholders take money out of the business as soon as it has come in, before any of the employees have been paid and before the bills have been paid. They have not looked after the accounts at all and we now owe the taxman £7,000, while they have taken £14,000 that we have no information about; they may have taken it legitimately but they will not divulge the information to us as to where the money has gone. They have not paid the electricity bill, which comes to a further £8000.
They also own another company in the same industry in a different town. We always do jobs for them, using our resources (posting accounts, paper, machinery...) but we are never recompensed for the expense incurred. These people are going around the country buying up failing businesses in this area and simply pillaging them for as much as they can. Once the companies go bust, they are uncontactable for at least a year. One of them has stupidly shown me his current account balance and he has more than £300,000 which he claimed was from the sale of a house.
We have had three accountants hired, then fired as soon as they come too close to completing the books. We have three employees who are not on PAYE because these men will not sort it out. Their role in the company is to issue pointless orders that they then forget about, or get angry about once they cannot be done, thus giving them reason to fire people willy-nilly.
None of us has contracts so they can do what they want. Worse still, the company was originally a charity, we have people with learning difficulties doing all of the manual work, getting no reward- we are suppose to offer them training, but the majority shareholders always discredit every course suggestion we come up with. These shareholders have contributed nothing, they have brought in no new customers, but blame us for this, but we won't bring in new customers for them to take all the profit from our hard work.
We have just applied to a debt recovery agency to bring in outstanding money owed to us by our customers; we estimate this to be around £27000. We know as soon as it hits our bank account, it will be taken by the two majority shareholders, with no questions answered.
They appear to be running the company into the ground, they have bought several, unnecessary machines on lease purchase for 5 years, costing us £2000 per quarter, for no reason...these are the kind of decisions they have made.
We are the ones who understand the company and the industry, but we are not in control at all.
We would take them to court, but the company is about to go bust anyway and we'll be saddled with their debts (e.g. tax, NI, electricity & hire purchase).
Can anyone offer comprehensive advice on how to deal with this type of person?
We feel we can run the company better and have its best interests at heart, we will have a few teething problems as none of us has ever run a company ourselves. But, we want to create a good working environment that protects the vulnerable people in our charge and offers them the training and rewards they deserve. The majority shareholders are taking advantage of people with disabilities, but using the same disabilities as a focus point to market the business.
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Comments
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None of us has contracts so they can do what they want.
Even if they not issued you a contract you do have the basic statutory provisions of holdiays, minimum wage, job protection etc.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
We would take them to court, but the company is about to go bust anyway and we'll be saddled with their debts (e.g. tax, NI, electricity & hire purchase). What for? Sorry, but being a set of bas!!!ds isn't illegal and nor is mismanagement.We feel we can run the company better and have its best interests at heart, we will have a few teething problems as none of us has ever run a company ourselves. But, we want to create a good working environment that protects the vulnerable people in our charge and offers them the training and rewards they deserve. The majority shareholders are taking advantage of people with disabilities, but using the same disabilities as a focus point to market the business.
The only thing that I can think of is whistleblowing - inform the authorities. Presumably they have contracts with the local authority or someone in the public sector?0 -
No:
[FONT=Verdana, Arial, Helvetica, sans-serif]Section 459 Companies Act 1985
'A member of a company may apply to the court... for an order... on the ground that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of its members generally or of some part of its members...' [emphasis added; a 'member' is simply a shareholder]'
We were thinking the minority shareholders may be able to do something under this part of the companies act, as they have never been informed about the money being taken out and whilst the majority shareholders have received dividends, they haven't. Plus, surely it's illegal to employ people off the books, when those people try to register self-employed, they're not able to because they are told what hours to work rather than projects to undertake.
[/FONT]0 -
And, I'm not sure about the whistleblowing, I think it will have reprecussions on the whistleblower rather than the makority shareholders?0
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Who would be the local authority to contact with reference to PAYE and contracts? I don't know.0
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No:
[FONT=Verdana, Arial, Helvetica, sans-serif]Section 459 Companies Act 1985 [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]'A member of a company may apply to the court... for an order... on the ground that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of its members generally or of some part of its members...' [emphasis added; a 'member' is simply a shareholder]'[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]We were thinking the minority shareholders may be able to do something under this part of the companies act, as they have never been informed about the money being taken out and whilst the majority shareholders have received dividends, they haven't. Plus, surely it's illegal to employ people off the books, when those people try to register self-employed, they're not able to because they are told what hours to work rather than projects to undertake. [/FONT]
But you didn't say that you were shareholders - you said "we" (the staff) would like to take them to court, and unless you are shareholders, you can't.
And no, it isn't illegal to employ self-employed people - who do not get tax or NI paid for them as they are responsible for this themselves.
If the employer found out who whistleblew then there may be repercussions, yes. Do you think there are fewer in taking them to court? If you want to do something about this then someone has to take some form of action. Otherwise nothing can happen to change it.0 -
I'm not a shareholder, and it wouldn't be me taking them to court, but two of the minority shareholders. If a new company were to be created, then I would become one of the shareholders of the new company.
We are not allowed to register self-employed because of the way we work for the company - generally, if you are told what hours to work, when you are paid by the hour and not for a service, then you cannot register self-employed, HMRC won't allow it. They will investigate the company for employing people in the manner they are, but I don't want to risk losing my job entirely.
I think you're right though, someone has to take action, I'm just trying to work out the most approriate course.0
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