Plumbing Company
The Company based in St Albans, Hertfordshire, was incorporated in November 2011 and was formed after the previous Company was placed into Liquidation. The Director purchased the goodwill/name of the Company from the previous Liquidator, in order that he could continue to using the trading name.
Buying the name from the liquidator does not on its own make it lawful to use. A director of a company that has gone into insolvent liquidation commits an offence under section 216 of the Insolvency Act 1986 if they reuse its name, unless an exception applies. Where the business is bought from the liquidator, the director must give notice to every known creditor of the old company and in the Gazette before trading under the name, and no later than 28 days after the sale completes (Insolvency (England and Wales) Rules 2016, rule 22.4).
The Director took the decision to cut overheads in the new company by reducing staffing levels. The Director had hoped this would assist the new company with cash flow. The Director was responsible for quotes and job management. The Company had two engineers, an apprentice and an administrative assistant.
The two engineers working for the Company did not always take the care required to avoid errors, causing job call backs, or other fault issues. Some of the work carried out by the Company was on a sub-contract basis. The poor workmanship led to the Company not being used as a sub-contractor. The Company struggled to find work, wages were not paid on time and the engineers were unhappy.
The Director suffered a nervous breakdown and as a result, work stopped for a number of months.
The Company accountants had not been paid for any work they had undertaken, and stopped submitting real time submission for PAYE information.
The Director recognised that the Company could no longer continue to trade. The engineers were dismissed without notice and the company ceased trading. AABRS® advised that the only viable option left was to place the company into Creditors Voluntary Liquidation.