Company Director Stress 7

Bailiffs.

What will they do to me and my company?

Contact HBG Advisory for advice.

“The way I see it, every life is a pile of good things and bad things. The good things don’t always soften the bad things,

but vice versa, the bad things don’t always spoil the good things and make them unimportant.” – Doctor Who

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Written by
John A Waller
Director

Bailiff Powers With A Ltd Company

Bailiff Powers With A Limited Company. Different than when dealing with personal creditors.

What is Bailiff?

In England and Wales. A bailiff legally is a sheriff’s officer who then administers writs and processes.

England and Wales

In England and Wales. Many “bailiffs” exist. Some are concerned with executing court orders, usually regarding debts. They may also then carry out semi-official supervisory powers.  Those concerned with carrying out court orders are bailiffs. However, changes in 2014 to the law have now given names to specific areas they carry out.

Scotland

In Scotland, bailiffs do not operate. Instead, Sheriff officers exist. Their roles are fairly similar, though.

Northern Ireland

Northern Ireland ceased operating bailiffs for Enforcement of Judgements Office (EJO). Operated by the Courts Service. EJOs do not act like Bailiffs; instead, they negotiate payment at an affordable rate.

However, before EJOs can be involved, the creditor must issue a court claim and obtain a judgement. Then you would have to fail to pay by that judgement.

Magistrates’ Bailiffs

Civilian enforcement officers – employed by Her Majesty’s Courts and Tribunals Service, empowered to seize and sell goods to recoup money owed. They may also perform warrants of arrest, committal, detention and control. Employees of private companies authorised by the Ministry of Justice may also act.

Certificated enforcement agents

Local authorities use Certificated enforcement for collections, Her Majesty’s Courts and Tribunals Service and landlords for various reasons including a collection of taxes, road traffic debts and commercial rent arrears.

County Court bailiffs

County Court bailiffs remain directly employed by HM Courts Service. They carry out enforcement for the County Court. The current frequency of different cases means they therefore remain mainly involved in recovering payment of unpaid County Court judgements. Like magistrates’ bailiffs, they can seize and sell goods to recover a debt. They also affect and supervise the possession of the property and return of goods under hire-purchase agreements. They also serve court documents, execute arrest warrants and search warrants.

High Court enforcement officers

High Court enforcement officer executes writs and warrants for unpaid court judgements. They also carry out evictions from land once possession has been ruled. Most High Court enforcement officers’ work remains carried out by certificated enforcement agents acting under the authority of a senior High Court enforcement officer, often a director of an enforcement firm for whom the enforcement agent works.

For further reading on High Court enforcement officers, please read ‘What powers do High Court Enforcement officers have?’

Water bailiff

Water bailiffs exist in England and Wales to prevent illegal fishing. They remain governed by the Salmon and Freshwater Fisheries Act 1975.

Farm bailiff

Farm bailiffs exist on landed estates. They’re employed by the landowner and collect rents and general operational control of the estate.

Epping Forest bailiffs

The Epping Forest Act 1878 ensures the conservation and preservation.

Jury bailiffs

Jury bailiffs act as ushers in a court maintaining Juries.

Rights & Powers When Dealing With Debt Of A Limited Business

Limited company debts, however, remain a separate legal entity to the company directors. Therefore, when a bailiff or enforcement officer attempts to remove goods by seizing assets on behalf of a creditor. Goods only belonging to the company may be removed, and not those of the company’s individual or officers.

A Bailiff may only visit your home if that’s, therefore, the place of trade.

Bailiffs appointed to collect debts owing from your limited company usually, therefore, attend when you have been unable to enter an agreement with a creditor.

Often, however, this can turn out a stressful event for company directors. Therefore, it is essential to understand the Bailiff’s authority and power, and what are your rescue options. HBG Advisory needs to be consulted for advice before bailiff action to protect all party interests.

Many businesses in the UK have bailiffs attend due to the non-payment of:

Corporation Tax, please read ‘Can’t Pay Corporation Tax! What Next‘?

VAT; please read ‘can’t pay vat options‘.

Ni & PAYE please read ‘clear HMRC debt‘;

Trade Creditors;

Rent arrears ;

Arrears of Rates.

Bailiff Rights demanding entry into your business premises or home.

Bailiffs may not force entry into your business premises or home. You have to either allow them entry by invitation. However, they may gain entry if:

  • Collecting unpaid magistrates’ fine;
  • Outstanding CCJs;
  • High court judgments;
  • a court authorised bailiffs, so they may collect outstanding debts owed to HMRC;
  • Court authority issued to protect goods hidden.

Bailiffs authorised to gain entry may only do so by reasonable force.

What does “Reasonable Force” imply?

To gain any entry. Bailiffs are required to enter a building by existing entry points. These points are:

  • Doors;
  • Gates; 
  • Garage.

Bailiffs may apply through gain entry via the above by breaking any locks or attached padlocks.

However, they may not climb through windows or break through walls, climb over walls, fences or roofs.

No physical contact to force entry is allowed, ever with either you or indeed others.

Do bailiffs work on weekends?

Yes.

Visits a Sunday do not take place. Also, non-take place if a Saturday falls on a Bank Holiday.

Who Then Are Bailiffs?

Bailiffs – also known as enforcement agents. Additionally, they then often work on behalf of courts, but also act for HMRC.

The HMRC instructs bailiffs without a court order, ensuring, therefore, a faster collection process.

Debt collectors are not bailiffs, and therefore have no specific powers of entry or seizure of goods.

What then can bailiffs take?

What can bailiffs therefore then take from a limited company?

When wishing to collect monies ruled owing by the courts. Bailiffs may seize assets only owed by the debtor being a separate legal entity to the directors. Personal assets owned by other than the company may not be seized.

So items that may be seized from the limited company:

  • Available cash;
  • Stocks and realisable work in progress;
  • Desks, Chairs, Computers, and other office equipment;
  • Valued machinery;
  • Company vehicles including cars, vans, lorries, buses;
  • Plant.

What happens if a Limited company director has a bailiff visit them at home for their limited business debts?

A bailiff can only take control of the debtor’s goods at its place of business if a limited company

A director who has not personally guaranteed the bailiff’s debt is chasing may therefore be not liable for the company’s obligation. Thus, the bailiff has no legal right to attend nor remove goods from the directors’ home.

Providing the limited company does not trade from their home or store, stock or finished goods belong to the company at their home.

Suppose a debt collector or bailiff ignores the above. Then the director may apply to the courts to issue an injunction, as they are acting illegally.

In the case of a bailiff acting in this manner, serious consequences may apply against them. They are acting in breach of Schedule 12, Tribunals Court and Enforcement Act 2007, Schedule 12. You may bring an action to injunct a bailiff acting illegally, along with the instructing creditor, holding them jointly and severally liable.

The director, though, must allow the creditor and bailiff to cease and desist attempting to collect a company from home before commencing injunctive relief.

Role Of Bailiff?

The primary function concerning limited companies in debt remains to agree on a repayment arrangement with the debtor if you owe money as a limited company. If no agreement is accepted, they will want to take control of goods to the value of the debt, including costs. Therefore, ensure they are a certificated bailiff.

Bailiff Powers With A Ltd Company – Can They Attend Without Notice?

You need to have seven days’ notice of a bailiff visit. Actioned by using a notice of enforcement. The visit is usually required to take place between 6 am and 9 pm, on any day of the week.

Bailiff’s first visit entails recording business assets for a possible seizure., however, it is often used to encourage debtors to repay money owed without actually taking goods away.

Controlled Goods Agreement.

controlled goods’ agreement is applied securing the debtor’s goods after an enforcement agent leaves them on the debtor’s premises. This then allows the collection of the agreement to repay if not adhered to.

Can A Bailiff Force Entry?

YES

They can force entry to your business premises if they have not been in previously.

Under certain circumstances. They are:

  • When a court has therefore awarded permission for bailiffs to enter.
  • High Court Enforcement Officers or bailiffs from the County Court are involved.

Bailiff Powers With A Ltd Company – Power Of Seizure. What Are Their Rights?

The limited company remains separate from an individual. As such, limited companies remain liable for their debts rather than the directors. They may only seize assets and remove items; therefore, belonging to the business providing no personal guarantee for business borrowing has been given.

The threat of removing items usually influences you to agree to an instalment plan. Therefore, it allows you to retain and use the goods listed, if you meet the terms and conditions of the repayment arrangement. The goods used as security remain subject to a Controlled Goods Agreement.

If you disagree with a repayment, then they have the right to sell your company’s items goods at a public auction. They, though, are required to provide seven days’ notice before doing so.

Bailiff Powers With A Ltd Company – What May Bailiffs Take?

Bailiffs attend and take from both business and residential premises (non-company debt only). However, what they are then allowed to remove remains restricted and only remove items sold at auction.

Strict guidelines, however, control what bailiffs can remove. Therefore, dependent on if they are attending to collect a business debt from a limited company?

Bailiffs and the HMRC

If your limited company has tax debts, and they are now considered HMRC arrears, or you have failed an HMRC time to pay? The HMRC officer will usually instruct enforcement officers to attend your business without going through the courts to collect money. An HMRC enforcement officer has powers similar to but is not an HMRC. Bailiff (Not court-appointed when instructed directly by HMRC).

READ FURTHER: Clear HMRC Debt.

Bailiffs and Coronavirus COVID19

Enforcement at commercial premises

Enforcement agents (Bailiffs) visiting a business premise should ensure they then observe at all times any measures that the
the business has in place to ensure the safety of customers and workers. For further guidance, view Working safely during COVID-19: enforcement
agents 

Using your home as a Registered Office and Bailiff?

Nominating your company’s registered office at your home means you risk bailiff turning up! Therefore, it is advisable to rethink this to avoid stress in that eventuality happening. Bailiffs may only enter a residential property by normal entry modes and may not use force to enter.

Available Help For Limited Companies?

Options exist, however, depending on what situation exists. Wishing to continue trading, when unable to agree on a payment plan with a bailiff (acting on behalf of your creditor), a company voluntary arrangement may be your best option. However, If your cash flow will not fund repayments, or you prefer to either restart or close your business. Then other options are available. Contact HBG Advisory business rescue experts for further help.

Bailiff Powers With A Limited Company – Ensure You Seek Professional Help Early?

Negotiating an affordable repayment plan is therefore vital. Ensure you deal with bailiffs, and any deal remains reasonable and achievable. A missed payment may mean they may seize the listed items and send them to auction for sale.

Complaining about bailiffs

Ensure you make a written note of what the bailiffs advise you owe. Legally, bailiffs may only attach set charges to your debt. You are entitled to protest otherwise if the charges are extortionate.

If unsure, then seek advice quickly. Bailiffs are always bound to act professionally, within the law standards agreed nationally.

You can complain to the court and request that a bailiff’s certificate is withdrawn if threatening behaviour is proven.

If in doubt, ensure you seek professional help. Consult as soon as possible with a licensed insolvency practitioner to ensure stopping bailiffs. Contact HBG Advisory on 0800 612 5448. Trusted Company debt advice.

For further help, meet The Team, AT HBG Advisory.


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