Fraudulent administrator!

hughie2020

Hello! 

1.5yrs ago my partner was in the process of being made redundant, so decided to set up a Ltd business with a friend who already had an existing Ltd business. It was agreed that the friend would set up the business and my partner would be added as a director when his redundancy process ended, and the administrator who worked for the existing Ltd would also take on admin work for the new business. 

My partner was later added onto companies house as a director, but without any significant control - an admin error apparently. 

My partner and the administrator have always had a difficult working relationship, and over the last 6 months she has stopped responding to most of his communication and requests. She has withheld access to many of the business accounts including banking, safe and trade accounts. This has caused tension between my partner and his business partner, who is happy for her to have control and oversight over these things. 

My partner managed to get log in details for his business banking account and discovered that outgoings were a lot higher than expected. He sought advice from an independent accountant who advised him that things did not seem legit and he should consider his options. 

We have since gained access to some of the accounts and discovered that the administrator has given herself a payrise, added her car to the fleet insurance and fuel card system - even though she works from home, is putting her phone bill through the business, has added the friend’s second business to the SAGE accounting software without recharging and has been transferring money to the second business without invoicing to substantiate the charge. The business partner has also been taking advantage and spending more than agreed on things such as fuel, workwear and tools. 

My partner wants out, he was ready to walk away until checking companies house to discover that last week his status on companies house has been changed to a director with 50% control. 

My partner and his friend have agreed that they will finish trading together on 31st Aug, when their last project should be finished. The administrator needs to go. My partner wants to keep the business name, accounts and tradesman they employ, we will cover the administration and work with an accountant. 

Lessons learnt the hard way - in hindsight he should never have trusted his friends guidance without oversight of these important things. 

We’re looking for where we can get advice on what our next steps should be? The administrator is still withholding access to SAGE and also VAT and filing info, so feeling a bit stuck. 

LinLui

You need proper legal advice. Paid for legal advice. You cannot simply get rid of an employee that easily, and you cannot accuse someone of criminal activity or fraud if the other partner doesn't agree. There are also legal responsibilities about transferring companies from one owner to another. Given what you have said, then I wouldn't recommend taking anonymous (and possibly incorrect) advice on teh internet. The cost of proper legal advcie will be minimal compared to the cost of what could go wrong here.

mybestattempt

I agree with @LinLui, you need proper professional advice.

It's not even clear from what you have said whether there is just one company (or two separate companies) and how the shares are held.

To run a limited company business without the friend/administrator your partner will need to own all (100%) of the shares in that company.

Savvy_Sue

Given the potential mess being left behind on 1st September, making a clean break seems like a much more sensible option. Definitely needs legal advice, but if your partner can let existing customers know that wef 1st September he will be changing the name he works under, the loss of business may not be too great. UNLESS (and this is where the legal advice is also needed) the original chap wants to keep the name. 

LinLui

Savvy_Sue said:

Given the potential mess being left behind on 1st September, making a clean break seems like a much more sensible option. Definitely needs legal advice, but if your partner can let existing customers know that wef 1st September he will be changing the name he works under, the loss of business may not be too great. UNLESS (and this is where the legal advice is also needed) the original chap wants to keep the name. 

And assuming there is no legal agreement about not pinching customers...