Recruitment Agency Not Paying (JNR Digital Ltd )

robiee4u

Hi,
I am an IT contractor and have my own limited company. I have done software development work for a client though a recruitment agency called JNR Digital Ltd, a one man company, Jordan Norris, who has not paid me £17,340 of worth of invoices. I have been chasing the director for several months now. He has not been denying the debt but has been asking for more time with numerous excuses.
I have now just found that he has incorporated a new company with company house called WEAREHEART RECRUITMENT LTD, trading as Heart Recruitment. The end client has paid him in full but he has not paid me a single penny from the due payment since the contract has ended. He is actively promoting the new business now and letting the old one die.
I was wondering if anyone has got similar experience.

longtimelurkersam

robiee4u wrote: »

Hi,
I am an IT contractor and have my own limited company. I have done software development work for a client though a recruitment agency called JNR Digital Ltd, a one man company who has not paid me £17,340 of worth of invoices. I have been chasing the director for several months now. He has not been denying the debt but has been asking for more time with numerous excuses.
I have now just found that he has incorporated a new company with company house called WEAREHEART RECRUITMENT LTD and a complete new business website weareheart.com. The end client has paid him in full but he has not paid me a single penny from the due payment since the contract has ended. He is actively promoting the new business now and letting the old one die.
I was wondering if anyone has got similar experience.

Cannot advise but I would suggest you take some proper advice NOW and put in an action or whatever agaisnt the previous company as I bet it won't be long before it gets liquidated and you won't see a penny. :mad: You have probably given him too much time already, I would suggest time to go hard ball.

spacey2012

He is waiting for you to serve court papers or a statutory demand so he can use the debt to wind the old one up.
This is a huge learning curve here on LTD companies and how they work.
Getting work is very easy, getting paid is the skilled part.
As this is LTD to LTD contract, there is very little you can do to get your money, court orders are only worth what they have in the bank, which usually is nothing.
Not the advice you are looking for but you may have to cut your losses and learn how the game works with respect to working for LTD companies.
A credit check and bank references are mandatory before giving credit to a LTD company.
You have to see yourself as giving them services on a pay later basis which effectively is interest free invoicing credit as they can sell the services on to their client by invoicing them.
What can sound like work can quickly turn out to be throwing the money away.
Good references, one from a bank and a guarantor, or a credit limit for new clients.
Once the client reaches the credit limit they must pay before obtaining any further work, your credit limit should be what you can afford to lose.
Example : Maximum on account balance £1000, over this the customer is placed on stop until they pay some of the invoice down.
Allowing a un referenced and un guaranteed LTD company free and open ended credit wont see you last very long at all.
You are going to have to re-think the strategy and start thinking along the lines of you are providing "invoicing credit" to your customers who can get paid from their customers and not pay you, thus running up an excess debt.

You have to work a strategy to limit the amount of invoicing credit to a customer to protect your business.
No company will allow any new customer an open ended account without some very serious guarantees in place.

Wywth

Almost £20k of credit to a limited company which sounds like it hasn't been around long? :eek: :eek: :eek:

What type of credit checks did you do before granting this amount of credit?
I do hope you got personal guarantees for that amount ... but I fear you didn't.

Unfortunately if not, the shareholders are afforded limited liability (but I guess you know that operating as a limited company yourself) and any other company is an entirely separate legal entity.

Sounds like, as spacey2012 says, you have just learnt a very expensive lesson.

All I can advise you is don't waste any money chasing this bad debt unless you first assure yourself there is a possibility the party you formed a contract with has a possibility of paying you.
(I'm sure it goes without saying, but in future carry out these checks before you grant any credit)

longtimelurkersam

If I read your post correctly you worked for a client who paid the recruiter who failed to pay you? Whilst it wont get you any money I would be going to have a wee chat with the client to ensure that they are aware of his business behaviours. You might find yourself with some work direct to them and cutting the middleman out.

I guess you don't know any nasty people?

Mistral001

longtimelurkersam wrote: »

If I read your post correctly you worked for a client who paid the recruiter who failed to pay you? Whilst it wont get you any money I would be going to have a wee chat with the client to ensure that they are aware of his business behaviours. You might find yourself with some work direct to them and cutting the middleman out.

I guess you don't know any nasty people?

The Op has already published the name of the frim on the www in his post above so going to the clients would not be much of a problem as long as he/she was sure that everything he/she told them was correct.

With regard to doing some work for clients in the future by bypassing the recruiter, I am sure recruiter has terms and conditions which prevents that so tread carefully. I bet he pays his lawyers fees on time!

terra_ferma

I don't agree that this is not how ltd companies work, this is a case of fraud. It would be different if the company had simply gone out of business, but this sounds like an individual who knows what he's doing.

Hope you get your money, but personally I would get legal advice asap, as the sum is substantial.

Mistral001

terra_ferma wrote: »

I don't agree that this is not how ltd companies work, this is a case of fraud. It would be different if the company had simply gone out of business, but this sounds like an individual who knows what he's doing.

Hope you get your money, but personally I would get legal advice asap, as the sum is substantial.

Do not bank on this being fraud. Incidentally as far as I can see it is impossible for a Ltd Company to commit fraud. Fraud can only be commited by people and a Ltd company is not a person. Unless the directors are not disclosing something that they should then it could be a straight-forward case of Limited Liability being just what the name says and having limited liability.

terra_ferma

Mistral001 wrote: »

Do not bank on this being fraud. Incidentally as far as I can see it is impossible for a Ltd Company to commit fraud. Fraud can only be commited by people and a Ltd company is not a person. Unless the directors are not disclosing something that they should then it could be a straight-forward case of Limited Liability being just what the name says and having limited liability.

I'm not talking about fraud in the legal sense, but surely there must be something stopping people setting up a ltd co after the other just to claim insolvency and pocket the money.
My point is that the issue here is not the OP not understanding how ltd companies work, but an individual using one to appropriate money that doesn't belong to him (i.e. stealing)....
If he wasn't using the ltd co structure he'd find another way.

Mistral001

terra_ferma wrote: »

I'm not talking about fraud in the legal sense, but surely there must be something stopping people setting up a ltd co after the other just to claim insolvency and pocket the money.
My point is that the issue here is not the OP not understanding how ltd companies work, but an individual using one to appropriate money that doesn't belong to him (i.e. stealing)....
If he wasn't using the ltd co structure he'd find another way.

Limited companies are there to protect their owners from personal finacial responsibility for their business - eg. the company can go bust and the owner can still keep their house. The personal financial risk of the people who own the company is largely transferred to people and companies who invest in that campany and those who trade with them. However these risks are reduced by the law insisting that Ltd Companies publish annual accounts for all to see.

The purpose of ltd comapnies is that business people, inventors etc can be more bold in their businness ventures without the worry of being left homeless. That is considered generally a good thing in many business environments.

If you have a big financial exposure to a Ltd Company you should regularily be checking their financial health as published in their annual accounts In fact you should check their financial health before trading with them.

paddyrg

Find a lawyer now, and go through your options - it may be for instance that the individual concerned has sent some emails/correspondence/contract elements as an individual as opposed to as the ltd company - maybe there's something that would then demonstrate a personal liability.

I don't know the ins and outs, but the threat of getting him disqualified as a director *may* help if it will kibosh his new business?