Limited companies

[CamdenTownie]

Hi 👋

I have a question, what does being a limited company actually mean?

I think I have an idea but for instance if a limited company takes my money, only completes a small part of the work I've paid for then dissolves and the company has no assets what does this mean for me?

I'm having some problems with a builder I've paid a vast amount of money to and now I'm really concerned that he's just disappeared and I'll have no chance of getting the work completed or any of my money back if he simply dissolves.

It's a fairly new company that was registered in late 2018.

Thanks 🙏

A limited company is a legal entity in its own right, separate from its directors and shareholders. It is owned by the shareholders, which may or may not be the same as the directors.

If you entered into a contract with the Ltd co, you have no recourse against its directors/shareholders when it comes to getting your money back or the job completed.

So what happens then? Does it mean that I just have to accept that I've lost my money?

Thanks

Potentially. Phoenixing is really common amongst builders. It’s why you’re never advised to pay up front for building work.

Yes.

Phoenixing is where the director dumps one company and immediately opens up a new company usually trading in exactly the same style but has dumped the debts of the old company. V common for small building firms unfortunately.

Almost invariably these companies have no assets and even if there is a liquidation there's no way you will get your money back. If there are assets the liquidator will take most of the money in fees anyway!

I'd go on companies house and see what the company status is. Then write to the registered office asking for your money back.

Worth checking his directorship history too - see if this has happened before.

Go to companies house website. Look up the company and it will show the directors. If you click on the directors it should show what previous/other companies they are directors of

Yes. Being limited makes it easier to walk away although if Fraud or poor conduct is proved, they can be banned from being a director but this takes some doing