Ltd Company registered but T/A another registered company..... !!

baduk10
baduk10 Registered Posts: 34 ? ? ?
A situation has developed whereby it’s possible one of our debtors may turn bad. I’ve been looking at their account application form that was completed at the start of trading and came across an interest point. Here goes:

The situation is real, but the names are fictitious. The company we agreed to trade with and gave a £100,000 credit limit to is A.B 123 Contractors Ltd with its own Ltd company registration number; on their application they have stated their company name as being as above yet have said registered name as being A.B Controls Ltd… now both companies have their own company registration number, but the difference being the first company have only been trading for 2 years, whereas the second company have been trading for 25 years. It now transpires A.B 123 Contractors have a £3,000 advised credit limited recommended by a well known credit agency and the A.B Controls Ltd have a £100,000 credit limit also by a well known credit agency..

My question is “if each company have their own individual company’s house Ltd company registration number surely one cannot claim and state to be T/A the other company”… or can they?

My view is that they cannot and should not. Fortunately I am not responsible to authorising company credit limits, and have nothing to do with credit application forms – but when things go wrong it kinda then gets passed to me to resolve.

I just wondered what everyone else’s viewpoint was on the matter in hand?

Many thanks

Comments

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Company A is its own entity.

    Company B is its own entity.

    If company A is masquerading as company B to benefit from company B's great credit score - then that is wrong. However, if you are invoicing Company B then the debt may be with company B - it all depends on the specifics of the paperwork.

    What you can do about this in practice I don't know, but this needs invesigation - and the liquidators (if appointed) might be interested. They might not.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Just to add, ABC Ltd can t/a XYZ, even if there is an XYZ Ltd - as long as XYZ Ltd doesn't have a problem with that. Pretending to be XYZ Ltd is an entirely different matter....
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    Right thank you for that. The first company have four Directors of which 2 of the Directors are Directors of the 2nd, well established company. Our contracts are purely with the first company as this is the company that we invoice and collect the debt from. Had I have been dealing with the account from the off I would have questioned the situation from day 1. I just found it strange why company 1 being its own individual entity would disclose as T/A company No 2, apart from the fact that company 1 Is realitively new andonly has a £3k credit limit, whereas company 2 has a well establish healthy balance sheet and a recommended credit limit of £100k. It's not even as though company 2 has agreed to act as a guarantee for company 1.

    Well never mind, it looks like our accounts lady has been well and truly fooled by the whole situation, which I can only guess was their intention.

    Thanks for your response anyway.

    Regards
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    baduk10 wrote: »

    Well never mind, it looks like our accounts lady has been well and truly fooled by the whole situation, which I can only guess was their intention.

    Indeed. What you've explained here is quite straightforward so either a) she missed something pretty obvious or 2) they made a semi-fraudulent application. If the latter, then the directors could be personally liable for the bad debt (if it happens) - maybe, or at least liable for the fraud. Worth checking out.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    "yet have said registered name as being A.B Controls Ltd"

    If they said that, then that really implies that if the contract was set up with the name of 123 Contractors, they are actually allocating it to the entity A.B Controls Ltd.

    Really, really look into this. Probably not much you can do but if there is, it's worth pursuing.
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    Thanks Moonsoon.

    I'll see how tomorrow pans out. It's a £25k debt so I'll speak with them tomorrow. The debts been outstanding since Feb 2012. Why credit control have only just inform me god only knows. Still, i'll do some legal research in the morning before I speak with them. Maybe the phase "winding up petition" might promptthem into resolving the situation.

    Thanks again

    Regards
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    Oki Doki... all of the above seems reasonable and fully understood...

    It now transpires that we have the 2nd company A.B Controls Ltd declaring to t/a A.B 123 Contractors. It looks like the T/A description is NOT Ltd after all, but now it begs the question as to whether you can use the name "trading as" ... if the same named company is registered Ltd!!

    Anyone... please
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    As long as the named company agrees, no problem.

    E.g.

    My company is called Monsoon Ltd. I also own Badger Accounting Ltd.

    Monsoon Ltd t/a Badger Accounting is fine, as long as the owner of Badger Accounting Ltd (me) doesn't mind.

    Monsoon Ltd t/a Badger Accounting Ltd is not fine. You can't t/a Ltd.

    Make sense?
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    Yes I fully understand, but the point I'm making is as follows:

    We have company number one, an entity in it's own right.. ABC Contractors Ltd which has 4 directors of whom 2 are also directors of XYZ Ltd...

    We have company number two, also an entity in it's own right.... XYZ Ltd, which is t/a ABC Contractors....

    In terms of trading ABC Contractors Ltd and ABC Contractors have nothing to do with each other. I'm just saying by them using the same name, one without Ltd and the other with Ltd it could be construded as being the same company! Maybe it's just me seeing it that way?

    Cheers
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    It's certainly misleading. The bottom line is XYZ Ltd could be t/a Tescos, Minnie Mouse, Noonootron5000 or anything it likes. It is and always will be XYZ Ltd, company number 123456789. And anyone assessing them for a credit account should only be paying attention to the legal entity.

    Easier said than done, apparently, especially when the company might deliberately be trying to pull wool over eyes...

    Unless I've missed your question??
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    Na, you're absolutely spot on... and yes it's a little misleading too.

    Anyway, after much discussion throughout the day it has been agreed by both parties that we are trading with the Ltd company, it is them that have signed our T&C so on and soforth.. It's just a case of now getting the funds in.

    Thank you anyway for taking the time to respond Moonsoon - it's been very much appreciated if not a little educational along the way.

    Regards

    Barry
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    and forgive me since i've spelt your name wrong yet again!
  • omega man
    omega man Registered Posts: 283
    I was a book-keeper for an engineering company in the 80's/90's and they had an associated company too.
    This was later closed in a voluntary liquidation.I also uncovered widespread fraud among the employees.
    I also dealt in credit insurance and i had sole responsibility for making sure nothing went ary, if there was something odd it was immediately flagged to the MD.
  • baduk10
    baduk10 Registered Posts: 34 ? ? ?
    Thanks for your comments Omega Man... they are appreciated. I will bear that in mind.

    Regards
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