So the sherriff of dublin knocked at my door today

whatnowguys

In relation to a ltd company I am a director of. Gave me a tax warrant letter for an amount in the region of 12000. The registered address is my (family) home address hence the knock at the door. He was actually a nice guy. I explained the situation. Business is dead. Tried to get things going to no avail. Looking at shutting up shop. He said something along the lines of, well there is obviously nothing we can take here, send me a letter explaining things and we'll work something out. My question is this, what happens next when I send him the letter telling him we have to wind things up? The family home is in both myself and (unmarried) partners names, has nothing to do with the business and neither does anything inside the house.

Not looking for legal advice, more just what are the procedures and what are the possibilities. I'm looking for a bit of piece of mind to be honest.

Tom Young

He was sent to your premises in Order to collect goods to satisfy a judgment debt, or judgment which is registered against you.

To stop this in its tracks: Pay the bill.

The next phases are: 1. Examination of your books of account to see whether or not the company has assets or funds which can be mortgaged or sold to the benefit of the Judgment creditor (in court under oath); 2. Appointment of a receiver by way of equitable execution; and 3. Attachment and Committal, this is a procedure where the creditor may seek to attach the debts to any/all of your finances by order of the Court a committal warrant is basically jail.

Now, in relation to the debt as a company debt. There are other processes by which the creditor may proceed.

If you can afford legal advice, then seek it.

whatnowguys

Tom Young wrote: »

He was sent to your premises in Order to collect goods to satisfy a judgment debt, or judgment which is registered against you.

To stop this in its tracks: Pay the bill.

The next phases are: 1. Examination of your books of account to see whether or not the company has assets or funds which can be mortgaged or sold to the benefit of the Judgment creditor (in court under oath); 2. Appointment of a receiver by way of equitable execution; and 3. Attachment and Committal, this is a procedure where the creditor may seek to attach the debts to any/all of your finances by order of the Court a committal warrant is basically jail.

Now, in relation to the debt as a company debt. There are other processes by which the creditor may proceed.

If you can afford legal advice, then seek it.

Just to clarify, the tax warrant was made out to the ltd company, not me, if that makes a difference. The company cannot pay this bill and will have to close. Also, there are no assets as such bar some basic bits and pieces as the leased equipment has already been handed back. Which of those phases apply to me/the company?

I personally cannot afford a solicitor. It has not been a good year at all.

Tom Young

Yep, it's pretty much the same thing as I mentioned above.

You can speak to a FLAC centre on this.

1 and 2 would do for the moment. You may also run into issues if you wind up or strike off the company where the revenue or creditor decides to enforce still thus restoring the company again and forcing you to pay for audit fees etc. Action can also be taken as against the directors of the company ... so don't think that just shutting up shop will solve your issues.

You should try and negotiate with whoever has the judgment registered.

I am sorry that you find yourself in this bind, but no harm in trying to speak with the creditor.

whatnowguys

Tom Young wrote: »

Yep, it's pretty much the same thing as I mentioned above.

You can speak to a FLAC centre on this.

1 and 2 would do for the moment. You may also run into issues if you wind up or strike off the company where the revenue or creditor decides to enforce still thus restoring the company again and forcing you to pay for audit fees etc. Action can also be taken as against the directors of the company ... so don't think that just shutting up shop will solve your issues.

You should try and negotiate with whoever has the judgment registered.

I am sorry that you find yourself in this bind, but no harm in trying to speak with the creditor.

Well, the thing is, it's the revenue that is looking for this money, is this what you mean by the creditor? The guy (sherriff) I spoke to earlier mentioned something about liquidating things earlier so presumably he is thinking along the same lines or has dealt with this a lot recently.

whatnowguys

Actually, final question, will the FLAC be able to answer questions about this and also money due on leased equipment/personal guarentees and other company debts?

Tom Young

FLAC Barristers/Solicitors, should be able to answer these queries. If for some reason you don't manage to get someone who knows, ask them to find someone who does within the FLAC programme in your area.

Tom

dermot_sheehan

You can't get your assets seized, an instalment order against you or a judgment mortgage registered against you if the debt is against a private limited company.

The company's property can be seized, and the company can be liquidated by revenue and the liquidator of a company will apply to court to have you restricted as acting as a company liquidator for 5 years unless the court holds you have acted honestly and responsibly as a company director.
http://www.irishstatutebook.ie/1990/en/act/pub/0033/sec0150.html#zza33y1990s150

In the rarest of cases, if a court thinks you were guilty of fradulent or reckless trading, it can make an order under section 297 or 297A of the companies act making you personally liable for the debts of the company and disqualify you from acting as a company director against under section 160, but this is rare and you would have to have been guilty of serious misconduct.

Our man in Havana

I see where people refer to the Revenue restoring companies that have been struck off. Who bears these costs esp where a company (or indeed its' directors) has no money or assets?

I would assume that the Revenue can't just order the CRO to restore a company? A high court restoration would cost a tidy sum.

Tom Young

Restorations can be done in the Circuit Court at less cost.

Andrews Tax Consulting

Tom Young is very wide of the mark here.

Gabhain is correct the liabilities are attaching to the company so the correct position is that Revenue should have no recourse to recover liabilities from the shareholders/directors. However, there is a caveat to this - if the liabilities relate to unpaid PAYE on directors salaries Revenue have the power to seek recovery from the directors personally.

Whereas if the outstanding liabilities relate to say, VAT, Revenue cannot - unless the veil or incorporation can be lifted - pursure the directors. To lift the veil of incorporation a Court would have to find that the directors were negligent and it is unlikely - if the amounts are relatively small - that Revenue would take this course of action.

These are the broad strokes - dealing with this situation is very stressful and there is a lot of mis-information about. To properly answer the question and establish what are your options more information is required.

Hope this helps

Derek

Andrews Tax Consulting

Andrews Tax Consulting wrote: »

To lift the veil of incorporation a Court would have to find that the directors were negligent and it is unlikely - if the amounts are relatively small - that Revenue would take this course of action.

This isn't totally accurate. Directors can be made personally liable for debts of the company if it can be shown that they traded recklessly. This is judged, arguably, at a lower standard than a negligent standard and the test is objective.

However, this only operates within the context of a winding up or examinership of the company.

shaneybaby

Deleted User wrote: »

This isn't totally accurate. Directors can be made personally liable for debts of the company if it can be shown that they traded recklessly. This is judged, arguably, at a lower standard than a negligent standard and the test is objective.

However, this only operates within the context of a winding up or examinership of the company.

it is possible to make this application outside the context of liquidation. For example, such an application can be made where it is proved to the satisfaction of the court that the company is unable to pay its debts/Judgment.
Section 251 CA 1990.

Simplyjoe

Andrews Tax Consulting wrote: »

Tom Young is very wide of the mark here.

However, there is a caveat to this - if the liabilities relate to unpaid PAYE on directors salaries Revenue have the power to seek recovery from the directors personally.

Derek

I cannot find any reference to this anywhere. I know there were discussions to implement this but I do not see where it was brought in?

FreudianSlippers

AFAIK it's usually done via s.297A of the CA 1963 or s.251 of CA 1990