Bill for dissolved limited company

Lou1973

Hi,

I'm not sure if this is the right place to post something like this, so apologies if it is in the wrong place.

I had a limited company for around a year, which was shut down in June 2009. Late last year I received an invoice from the company that did my accounts for £300 (over a year after my company had been shut down by them). Apparently the invoice was for their normal monthly fee's during the wind down period of my company (2 months), which I was not aware of at the time and they had previously omitted to send me.

When I received the invoice I contacted them and questioned whether I was liable to pay them as my company had been dissolved. However, I reluctantly agreed to pay them a set amount each month. Unfortunately, owing to personal circumstances, this debt became the least of my priorities and wasn't paid (and still hasn't been in full).

Yesterday, I received a letter from them threatening legal action. The letter was addressed to me, with my old company name in the address field.

My financial circumstances have changed significantly since I was contracting, which was only for a year anyway and I just can't afford to pay it all off in one go.

My question is, am I still liable for debt against my old company which no longer exists? If so, am I within my rights to offer them a payment term - even though I broke the first one?

Many thanks

Pennywise

Lou1973 wrote: »

My question is, am I still liable for debt against my old company which no longer exists? If so, am I within my rights to offer them a payment term - even though I broke the first one?

Many thanks

The question is whether the accountancy firm provided their services to you as director/shareholder of your one-man company or to your company. Most will word their letter of engagement to be addressed to the controlling director of a one-man company and if it's signed by you rather than by you "on behalf of ABC limited" then legally, it's probably a personal debt to you.

patman99

Afaik, unless it is a debt secured against your own property i.e a loan, then the debt dies with the company. You have to remember that a limited company is a legal entity (that is, for the purposes of Law, it is a 'person'). All debts it incurs are it's and it's alone. So when it ceases to exist then the only way anyone to whom the company owes money can get their cash back is by listing themselves as a creditor and taking their place in the queue behind HMRC.

My limited co. closed-down 2 years ago but Pitney Bowes still keep sending me bills. For the first year, I marked the envelope 'Company no longer trading - return to sender'. Now I just bin them.

theconvenor

If the company was dissolved using ESC16 then the directors have to sign a statement that they will personally pay any of the company's liabilities. You'll have to check your paperwork.

Pennywise

patman99 wrote: »

Afaik, unless it is a debt secured against your own property i.e a loan, then the debt dies with the company. You have to remember that a limited company is a legal entity (that is, for the purposes of Law, it is a 'person'). All debts it incurs are it's and it's alone. So when it ceases to exist then the only way anyone to whom the company owes money can get their cash back is by listing themselves as a creditor and taking their place in the queue behind HMRC.

No, that's not the full story at all. The question is whether you instructed the accountant in your personal capacity as director/shareholder or whether you instructed "on behalf of" the company. With one-man companies, a lot of the work done by the accountant will be advising the person (i.e. the director/shareholder) rather than advising the company, i.e. in such areas as personal tax, remuneration as salary/dividends/expenses, etc., and when it comes down to the striking off, the services are provided to the director/shareholder and not the company. So, the answer is to look at the letter of engagement and also look at the bill - to see whether the "contract" is between the accountant and the ltd co or between the accountant and the person.

Lou1973

Whenever I asked them about personal taxes they told me that it would cost me more money to do that.

The invoice is addressed solely to the limited company. However, the accompanying letter does have my name against it but suggests that the company is still trading (even though it was they who closed it down)

I'm not trying to get out of paying this as such, its just that financially this has happened at a really bad time. If they had of informed me just after my company closed, or even before then I would have paid up without question its just that my circumstances have changed significantly and this will mean not paying another bill in order to pay this.

It was the ESC C16 form that I completed, however I can't see anywhere that suggests I am liable for the debt of the company. The only bit that refers to debt is this:

The company does not intend to trade or carry on its business in the future.
Intends to collect its debts, pay off its creditors and distribute any balance of its assets to its shareholders.

I read this as the company will pay off its debts or am I just totally misreading it?

theconvenor

If the accountant had accrued the fee into the final accounts then the company will have benefitted from the tax deduction.
In the ESC16 you stated to HMRC that all creditors have been paid which would have included the accrued accountancy fee.
The accountants have been slow to get the fee out as it takes months to wind up a company after an ESC16 has been granted.
Not really sure about the strict legality of the position as ES stands for Extra Statutory.

Lou1973

theconvenor wrote: »

If the accountant had accrued the fee into the final accounts then the company will have benefitted from the tax deduction.
In the ESC16 you stated to HMRC that all creditors have been paid which would have included the accrued accountancy fee.
The accountants have been slow to get the fee out as it takes months to wind up a company after an ESC16 has been granted.
Not really sure about the strict legality of the position as ES stands for Extra Statutory.

Thanks for the additional information.

This was not included into the Final Accounts as they only invoiced for it late last year. I have an email stating that this was to do with an error in their system.

Someone suggested that I contact Companies House about this and I've had an email back from them stating that my company is still active and that I should seek legal advice. It sent all the paperwork back to them in May 2009 and they told me that it had been closed down in June. I'm furious and don't know what to do.

I wish I'd never taken their advice in the first place and stayed with the umbrella company.

I realise that this changes things significantly and that I will obviously have to pay the money but I'm worried about Tax Returns and stuff now.