Is there a way to cancel a contract?

tinamaddieroberts

Hi 

I'm struggling to get an answer to this and Vodafone are not being much help. 

I had a limited company which my Vodafone contract is with,  currently over £80 a month.  I have since closed and dissolved the company, however I still have the phone.  

Obviously because the charge each month is ridiculous, I want to stop this phone and switch to a personal contract however Vodafone will only allow me to switch to a personal contract at the same rates and terms.  They have quoted me £400 to end the contract early.  

Given that the bill is in the dissolved Ltd company name, is there anything I can do ? 

Thanks. 

Neil_Jones

Well if the company is dissolved the bank account the payment is coming from should have been closed too?  Where is that payment coming from?  Why is it not coming from the business account if it belonged to the business?

tinamaddieroberts

Hi Neil 

They advised me when I was closing the company to change the direct debit from my business bank account to my personal bank account as they said I had to do that to ensure there wouldn't be any negative affect on my.  I didn't think to challenge that so I did and changed the direct debits across.  So although the account for the contract is in my limited company name, the payments for the bills now gets paid directly from my personal bank account.  

pbartlett

if the phone contract is in the name of the company as opposed to your name personally then just cancel.it and stop payment - the £400 cannot be recovered from a dissolved company.  It is irrelevant which bank account the payments are coming from it is in whose name the contract it in

call them, tell them the company is dissolved, beware of and avoid any attempt to switch the contract to your name personally. Don't ask for a pac etc

vodafone cannot put anything on your credit file as a limited company exists for just this purpose ie to protect directors etc from claims. All this assumes of course you haven't given any personal.guarantees to vodafone when setting up the contract

Neil_Jones

tinamaddieroberts said:

Hi Neil 

They advised me when I was closing the company to change the direct debit from my business bank account to my personal bank account as they said I had to do that to ensure there wouldn't be any negative affect on my.  I didn't think to challenge that so I did and changed the direct debits across.  So although the account for the contract is in my limited company name, the payments for the bills now gets paid directly from my personal bank account.  

I think this was a mistake, as the whole point of a limited company is limited liability for the debts of the company or if the entire operation goes pear shaped so it doesn't fall back on the directors.  If you were self employed that's a different kettle of fish as its you, you and just you, whereas with limited companies, everything would be done in the name of the company, so Joe Bloggs for Pizza ltd for example.

So is the phone in your name or the company name?  Presume because of £400 its still under contract?

macman

pbartlett said:

if the phone contract is in the name of the company as opposed to your name personally then just cancel.it and stop payment - the £400 cannot be recovered from a dissolved company.  It is irrelevant which bank account the payments are coming from it is in whose name the contract it in

call them, tell them the company is dissolved, beware of and avoid any attempt to switch the contract to your name personally. Don't ask for a pac etc

vodafone cannot put anything on your credit file as a limited company exists for just this purpose ie to protect directors etc from claims. All this assumes of course you haven't given any personal.guarantees to vodafone when setting up the contract

Above advice is spot on. The only thing to be aware of is that obviously you will lose the number if you do this. If that's not an issue, then it's the best solution.
You also need to be sure that the original contract is still the one in place and was not put in your name when the DD was changed over.

tinamaddieroberts

Thank you so much guys. You have truly eased my anxiety over it.  

Contract is definetly still in the company name so I will cancel the direct debit in my personal account and phone them tomorrow to cancel the contract too. 

Again thank you. 

jnm21

I would go to their exec complaints team (look up CEO email address) & see if you can get some of the money paid from your personal account back.

I agree that you have been advised well above - out of interest, to those who have advised, what happens to the handset if VF have to write off the £400 - can they demand that it is returned or can they lay claim to a percentage of the value as a creditor of the failed company?

PHK

The advice about company debts is not completely correct. The liability is limited (hence the name) because there are situations where a director IS liable for a debt, so I would take professional advice before taking action. 

It’s complicated and depends on exactly why and how the company ‘closed’, and what actions you took. 

As an example, because of the standing of the company a guarantee might have been needed when taking out the contract. The guarantor would be liable for the debt. 

Jon_01

Before cancelling the DD check the paperwork and make sure you didn't personally guarantee payments. 
I remember this was something that some networks insisted on, on some small biz accs. . .

nick74

If you simply stop paying I think there is a risk that Vodafone will block the handset as being lost/stolen, rendering it useless.