Several liquidated companies....

[newnamene]

Hi,
I'm wondering if anyone can advise what is best to do here?
My sister is having a large (£800k which is a lot where we live) house build done by a mutual friend.
A few things this (recent) friend have said to me separately don't add up so I have done a bit of internet sleuthing and discovered this person has had 7 dissolved building companies in the last decade and has 3 current ones- 2 of which are in liquidation with outstanding debts of over £1m combined. These debts are not going to be repaid and are owed to private individuals, companies and HMRC.
It looks like they have relocated and they now cannot be traced but have then set up again and gone into liquidation again with even bigger debts. They are not on the land registry but I do know where they live and the newest company is the one contracted to my sister. Work has started and I don't want to stir the pot with her as she's already stressed and happy with the work so far but I'm worried.
Also, how do people get away with doing this again and again? I suddenly see this person in a whole new light.
Could I anonymously "report" this person to someone to investigate? Not all of the companies come up under a name search, it took a bit of digging to find the other records due to a spelling mistake in the name.
Or is this just normal and the consumer just has to accept the risk and research well?! Thanks -sorry it's long!

AFAIK when it's a limited company the liability is limited to the assets of the company. That's why it's called a limited company. IDK if there are any rules on who can be a director of a private limited company (there really should be but I've heard of this happening before) but that might be worth checking because that's the only thing I can think of. If the company rather than the individual was insolvent though IDK if there's anything you can do.

IANAL though so hopefully this comment bumps it so someone knowledgable can add more. Getting this moved to Legal Matters might find more people as lots of legal bods watch that topic.

Thanks Sister! I'll try to do that! Looking at it I think it's definitely suspicious as names of following companies have been similar - also the fact they've done a bunk and seem to have evaded the first insolvency according to the paper trail. Thankyou!

I think this is called Phoenix companies - go bust and rise again the next day in the same form exactly, but different legal entity. Personally I would get your sister out of that contract asap. The owner clearly has form. I also wouldn't believe that any typo of name was "accidental".

She needs to be paying for any materials, delivered to her site, so that she owns them. She needs to be on site all the time and to be able to lock those materials away so they cant be taken and used for other jobs. I would also want to be paying the workers directly with payment slips and signature for receipt - even if it is cash. How is she ensuring that the quality of build is monitored?

(Please note I have no experience yet of large builds, but this is my fear employing someone who has a dodgy track record. I do have friends who have lost £10k's, despite being savvy.)

Also, how do people get away with doing this again and again?

There are laws to try and stop this. When a company goes into liquidation, anyone who was a director in the previous 12 months is banned from being part of the management of another business with the same name or a similar name. The ban lasts for 5 years. There are also other relevant laws. You can try reporting them to the Insolvency Service at Complain about a limited company - GOV.UK (www.gov.uk). They can investigate and this may lead to the directors being disqualified.

Thanks I've had a look at that - does that apply to dissolved businesses too?
it's hard to know which route of complaint to take as not sure which of the routes would apply but it's shocking that they can change to a new name and just start again and again, taking 100s of thousands away from suppliers and not finishing jobs that are paid for. I guess there are only so many people you can do that to before you're run out of town too.

Phoenoxing a company is extremely common in the construction industry. Very difficult to get anything done about it unless they have direct evidence of fraud by the directors, and the report would come from the liquidators.

As @prh47bridge says, there are laws but they are very easy to circumvent.

I've no idea how to suggest your sister protect her money during this build, but she needs to be careful.

@Socialdilemmawhattodo thanks, useful pointers I will talk to her about. Regarding how to monitor the quality-This person is also employed as the project manager so that's my worry too!

Yes, it does apply to dissolved businesses. It will take you to the details you need to contact the Insolvency Service. Unfortunately, it may not get you anywhere even if you do report them.