Dissolving lots of limited companies and renting when rich

textbook

I'm working for a guy and bit worried about getting paid but that's another issue.  I checked his name out on google and he has lots of limited companies which have been dissolved in the last twenty years.  Someone told me this essentially legalised fraud where they buy lots of goods then when they can't afford to pay it back dissolve their limited company and don't have to pay the money back.   His job is  buying expensive cars and selling them to rich people he also does up houses then sells them.     Is he just using legal loopholes with a dodgy accountant to make himself rich?     How do they get away with this?

The first two houses he was in when I knew him were rented however he heard from the carpenter that he previously had massive expensive houses.  He's got a new foreign wife so is he trying to avoid paying his ex wife any money?  Why renting?

TVAS

Are you working for him or his limited company? If it is the former he can pretend there is no money and walk away. If the former you can take him to court. As for part payment on work done if possible. 

One can set up a limited company for a house renovation and when that is sold the company is sold it's called a special purpose vehicle (SPV): A Special Purpose Vehicle or SPV is generally a type of company that can be set up to hold a property. Where property developers want to obtain finance for their projects an SPV is normally used as it is a company that can be used on one project only and therefore represents fewer risks and liabilities for the lenders.

If the loopholes are legal one does not need a dodgy accountant. He would be acting within the law.  Dissolved does not mean it was due to the non paying of debt. You would need to contact companies house. Also was there anything on Google with his name and the mention of any creditors? Or the appointment of a liquidator, receiver? 

With regard to the divorce if the settlement was not final the ex could get half of a future property so renting would make sense in this regard. How do you know he has not given ex half of a previous house? He got married to foreign wife so she would be entitled to receiving a settlement, maybe he is hoping that because she is foreign she won't know what to do, people have the capacity to understand things fast when money is involved. 

Minkym00

A company can’t be dissolved unless it is solvent, and if it slips through the net a creditor can have it restored so that enforcement action can be taken.

A company with debt can only be liquidated - either voluntary (i.e. by the director/s) or compulsory (i.e. by a creditor). When this is done the liquidator (if it is not the Official Receiver) is legally obliged to report misconduct.

textbook

TVAS said:

Are you working for him or his limited company? If it is the former he can pretend there is no money and walk away. If the former you can take him to court. As for part payment on work done if possible. 

One can set up a limited company for a house renovation and when that is sold the company is sold it's called a special purpose vehicle (SPV): A Special Purpose Vehicle or SPV is generally a type of company that can be set up to hold a property. Where property developers want to obtain finance for their projects an SPV is normally used as it is a company that can be used on one project only and therefore represents fewer risks and liabilities for the lenders.

If the loopholes are legal one does not need a dodgy accountant. He would be acting within the law.  Dissolved does not mean it was due to the non paying of debt. You would need to contact companies house. Also was there anything on Google with his name and the mention of any creditors? Or the appointment of a liquidator, receiver? 

With regard to the divorce if the settlement was not final the ex could get half of a future property so renting would make sense in this regard. How do you know he has not given ex half of a previous house? He got married to foreign wife so she would be entitled to receiving a settlement, maybe he is hoping that because she is foreign she won't know what to do, people have the capacity to understand things fast when money is involved. 

Thanks for educating me on Limited companies.

Regarding getting paid, the bank transfer on first two payments says his company name - 'Design Game' or something,   I've no idea if this is a company or him in the eyes of the law.  This company name which is paying me isn't listed at companies house por anywhere on the net.  You said something if it was him or Limited company and one would have to pay and one wouldn't but I'm not sure which you meant?  Is this his SPV?   He worked in Property development in a rich area of the country.  Would you recommend not threatening him with small claims quite yet?  Negotiate payment?

 He buys and sells expensive cars for rich clients and does up properties.    He hasn't paid the second two invoices though- soon to be three.  Probably owed £1400.   When I asked GMB union they said that because he had paid the first two that's like a contract and will have pay the rest and will lose if it goes to small claims court.  true? 

One of his previous companies  has something online from 2015 which says Meetings of creditors then apppointment of liquidators in the Gazette

kimwp

If you are invoicing him, are you employed? (I don't know, but feel like there is a difference here)

Flyright

A company can absolutely be dissolved if it is insolvent. If the directors fail to file any of the statutory returns that need to be filed at Companies House, the strike off process will automatically be started by Companies House, ending in the company being dissolved, whether it is solvent or insolvent.

Directors can also start the strike off process themselves at any point in a company's life, whether solvent or not.  If a director does start tbe strike off process they are required to notify all creditors though, to give creditors an opportunity to object to the strike off and stop the company being dissolved.

textbook

kimwp said:

If you are invoicing him, are you employed? (I don't know, but feel like there is a difference here)

I'm a contractor who he's asked to work on his house which he wants to sell.  He's a property developer.   No  idea if I'm technically employed.  I've invoiced him and he paid first two but not last two.  

kimwp

I feel like not if you're a contractor and are invoicing him, but it might be worth checking as it might change the advice you are given / route you need to take.

textbook

kimwp said:

I feel like not if you're a contractor and are invoicing him, but it might be worth checking as it might change the advice you are given / route you need to take.

if he's paid the first invoice then that's effectively a contract and he'll lose at small claims unless he's a limited company and he could worm out of it.  i can't work out if he is.   The name i'm sending invoices I can't find on companies house and I can't find if it's under another limited company name.   Totally unsure what's going on

elsien

textbook said:

kimwp said:

If you are invoicing him, are you employed? (I don't know, but feel like there is a difference here)

I'm a contractor who he's asked to work on his house which he wants to sell.  He's a property developer.   No  idea if I'm technically employed.  I've invoiced him and he paid first two but not last two.  

Is this not something you should know, given the different tax positions of employed/self-employed?