When suing a limited company, there are a number of checks worth making to improve the chance of enforcement, should that prove necessary.
Before you start your claim, it is worthwhile checking their legal and solvency status, both at Companies House and the Insolvency Service. You may be wasting your time and money chasing a company that no longer exists or has just gone into liquidation.
It is also worthwhile rechecking these facts if you decide you need to enforce any unpaid judgments you have been awarded. High Court Enforcement Officers (HCEO) are not permitted to enforce against a company in liquidation or administration.
If you have concerns about the financial stability of the company, take action as quickly as possible before other creditors do!
Some companies will shut down and re-open as a new business to avoid liability for their debts. If this has happened, it is unlikely the HCEO will be able to seize any assets, assuming they have been transferred to the new company.
However, we do always check that the sale has been completed, including payment made, before the date of seizure. We have been able to seize and remove assets where the transfer had all been done on paper, but the agreed payment had not been made.
If the company has only changed its name, but still has the same company registration number, then it is still the same company as in the judgment/writ and enforcement can proceed.
An HCEO can enforce anywhere in England or Wales where he has reason to believe there may be assets belonging to the debtor. This means we can attend the registered office address, the trading address, branches, warehouses etc., including those belonging to third parties as long as we believe there are goods belonging to the debtor there.
Most judgments will have the registered address on them, however when it comes to enforcement, these are often accountants offices and there are no assets belonging to the debtor there. When instructing, it helps a great deal to provide the HCEO with details of all trading addresses and other locations where there are assets.
HCEOs can force entry into commercial premises if necessary, normally by changing the locks.
HCEOs can also enforce against a limited company that is based in a home office. However, they may not force entry, nor can they take any assets that belong to the individual resident. If the enforcement officer believes they belong to the company, he can seize them and the debtor will have five days to prove personal ownership.
All items that the HCEO has reason to belong to the business may be seized, with the exception of perishable goods. If a third party claims ownership of seized goods, they will need to prove those claims. If you dispute the claim, then a Master will decide through the process called interpleader.
Limited companies may not claim that items are exempt from seizure because they are tools of the trade. This exemption is only available to sole traders who exclusively use the items for their work.
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