Gas debt collections

fatboy88

Hi, not sure if this is the correct forum Please move if not but i'm sick of arguing with these people.

My partner has a business and its to do with a gas bill. The previous owners left a unpaid bill to eon/TNC Legal Services i think and moved to british gas. My gf then takes over the company and moves back to eon. The business trades under the same name but the accounts are in different names and meter readings were given when this was exchanged.

Can the old company chase her for the money which they are doing now and ring 3 times a day legally which they are quoting they can do.

Also can i report them for harrassment if they are ringing so many times and who to, as i know if its personal debt they cant ring you indefinitely but not sure how many times

many thanks
will

Premier_2

Is this a business account i.e in the name of a business, or a domestic account in the name of a person (or persons)?

If it's a business account, then the debt belongs to the business. It matters not whether the business has changed hands, names and/or whether the name of the person is changed who receives the bill, the debt belongs to the business. If the business does not benefit from limited liability, the business owner can be held personally liable.

If it's a domestic account addressed to one person, only that person is responsible for the debt.

fatboy88

It is a business account but like my parents gas bill usually says Mr (name) trading as (name of business).
What i know is most gas companies do not let you transfer away if you have outstanding debt, so this was transferred away by the previous owner and my gf just happened to transfer it back to the old company when she took over.
Maybe if this was a ltd company debt would stay witht the company but i cant see a sole trader passing debt on to a new owner.

Can anyone clrify this

many thanks

Premier_2

Before your g/f acquired the business, she should have carried out due diligence - that would have exposed the debt and she should have taken it into account when agreeing the transfer value.

If your g/f believes she has been involved in some form of deception by the previous owner, that is a dispute between your g/f and the previous owner, not the creditor (in this case the gas company).

With regard to harassment, there are some laws relating to how the creditor is allowed to pursue unpaid debts, but these are mainly to do with being honest and acting fairly/reasonably. As usual, the law is not specific on what 'fair' or 'reasonable' is.

There are extra laws providing some protection to consumers from businesses chasing debts, but this is not a consumer debt - it is a business to business debt and so consumer laws do not apply.

fatboy88

Thanks for the input premier

With regards to the debt, the gas supplier she migrated from was british gas to where she is now. This is the company that is owed money so she has proof that there has been a change of owner for nearly 2 years now before they have started chasing this debt. To be honest i wouldnt think the previous owner even knows this is outstanding as he had moved to british gas as we all know they dont let you migrate when outstanding monies are owed.
She did carry out due diligence as you can only check who the present supplier is at the time when you move into the premises. Do the usual meter readings before you decide whether to stay with the same firm or go to someone else. She is a sole trader not a company as such so and isnt the onus on the gas company to prove she owes the debt which i cant see how they can. So if she changed her trading name from A to B she wouldnt be liable as she isnt a registered company. She does have a VAT number which would be different from the previous owners.

I'm getting confused myself as i'm writing this.

So can i check if i owned a ltd company if i sold this and someone purchased this and had a new company number they would still be liable for old debt even though it trades under the same name but is legally a different firm?

Incisor

fatboy88 wrote: »

With regards to the debt, the gas supplier she migrated from was british gas to where she is now. This is the company that is owed money so she has proof that there has been a change of owner for nearly 2 years now before they have started chasing this debt. To be honest i wouldnt think the previous owner even knows this is outstanding as he had moved to british gas as we all know they dont let you migrate when outstanding monies are owed.
She did carry out due diligence as you can only check who the present supplier is at the time when you move into the premises. Do the usual meter readings before you decide whether to stay with the same firm or go to someone else. She is a sole trader not a company as such so and isnt the onus on the gas company to prove she owes the debt which i cant see how they can. So if she changed her trading name from A to B she wouldnt be liable as she isnt a registered company. She does have a VAT number which would be different from the previous owners.

I'm getting confused myself as i'm writing this.

Me too, reading it.

I don't think anyone is going to be able to give a direct answer without more info, but the general principle is this:

A business is like a person, when it comes to debt. So if someone sells their house, they keep their debts. The electricity bill or whatever stays with the person, not the house. Now, in this case, if it is a limited company that your partner bought, she now owns the 'person' with the debt and is responsible. If she just bought the stock and premises from the limited company, the original owners keep the limited company and still own the 'person' with the debt.

For a limited company, it is probably quite straightforward, but for other types of business it may be much harder to work out, although the principle will be exactly the same. Did she buy the business entity [the 'person'] with the debt? Or did she just buy the assets of the business entity?

Cardew

I would have thought that unless the previous owner had declared that debt, then the previous owner is liable for that debt.

I appreciate that they were probably not aware of that debt(but of course in law that is no excuse - they should have been aware of the state of all accounts)

I see the situation no different to the the previous owner 'concealing' debts.

Premier_2

Whilst the information provided by Incisor is technically correct, the information I provided was based only on what the OP has stated.

e.g. in the opening post the OP states "..My gf then takes over the company..."

Let us consider a hypothetical situation of a window cleaner who no longer wishes to continue with his business.
The window cleaner could sell the business as an entity to someone else. That new owner would then be quite right to say they have 'taken over the business'. The new owner would gain access to existing customers but also would have to provide a window cleaning service to those clients that had an existing contract with the business (e.g. paid for in advance - business creditors)

Or, the window cleaner could just sell the assets of the business. e.g. the ladders. A person buying the ladders obviously does not have any obligation to the former owner's customers/creditors but at the same time the new ladder owner wouldn't claim they 'had taken over the business' unless they were trying to deliberately mislead potential customers.

Also, one wouldn't ordinarily carry out due diligence when purchasing a set of used ladders, but would if buying a window cleaning company.

fatboy88

Sorry if i didnt make it clear its basically a sole trader owning a takeaway so she basically purchased the equipment, rest of the lease and goodwill of the company as i call it.

Cardew

It still boils down to the previous owner having a liabilty against the company(or themselves)that they did not declare on the sale.

You simply cannot 'hide' debts from the next owner.

Incisor

Cardew wrote: »

It still boils down to the previous owner having a liabilty against the company(or themselves)that they did not declare on the sale.

You simply cannot 'hide' debts from the next owner.

And from there it boils down to 2 different possible situations. If only the assets of the business were purchased, then the OP can tell EON to chase the previous owner. If the whole business was purchased, then the OP should pay EON and claim back from the original owner.

I fear that the sale may have been done in such a way that it is not immediately clear which mode of sale was adopted.