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Bailiffs Powers With A Ltd Company

Written by John A Waller, Director.Reviewed on: August 26th 2021.

Bailiffs at the Door

Bailiffs Powers With A Private Ltd Company in the United Kingdom differ from when dealing with personal creditors.

Directors need to note that you are deemed a separate legal entity in law as a director of a limited company. Therefore, the company’s debts do not belong to the directors unless personally guaranteed.

Therefore, if a bailiff attends for a debt owed by a limited company, they may not remove objects belonging to directors or any other separate legal entity.

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What is a 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 carry out therefore semi-official supervisory powers.  Those concerned with carrying out court orders are bailiffs. However, changes to the law in 2014 have now given names to specific areas they carry out.

To check out a certificated bailiff, you may view if they are real on the Certificated Bailiff Register.

Scotland

In Scotland, bailiffs do not operate. Instead, Sheriff officers exist. However, their roles are similar.

Northern Ireland

Why do bailiff not operate in Northern Ireland?

The Enforcement of Judgments Office (EJO) is a centralised unit in Northern Ireland for enforcing civil judgments related to the recovery of money, goods and property of the courts.   The EJO can also enforce civil judgments made by other courts outside Northern Ireland, including England/Wales, Scotland and the European Union.

Why do bailiffs not operate in Northern Ireland?

Northern Ireland ceased operating bailiffs for the Enforcement of Judgements Office (EJO). Operated by the Courts Service. EJOs do not act like Bailiff,s but 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.

The type of bailiff depends on the type of debt.

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 taxes, road traffic debts, commercial rent arrears, and magistrates court fines.

County Court bailiffs Powers

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 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 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 separate legal entities 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, not those of the company’s individual or officers.

Bailiffs and retention of title clauses.

Certain goods supplied by suppliers remaining unpaid may be subject to the Retention of Title clause.

Therefore, ensure such items are clearly identified.

Bailiff Home or Business?

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 attend when you have not agreed with a creditor.

Often, however, this can be a stressful event for company directors. Therefore, it is essential to understand the Bailiff’s authority, power, and 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, depending on the type of debt and 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.

  • Criminal fines;
  • Arrears of council tax.

Unpaid Tax bills

Bailiffs Powers With A Limited Company – HMRC threatening bailiffs

It is important to contact a licensed insolvency practitioner for help stopping HMRC instructing bailiffs.

Bailiff Rights demanding entry into your business premises or home.

Bailiffs may not force entry into your business premises or home to leverage you paying the debt . 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 can collect outstanding debts owed to HMRC;
  • Court authority issued to protect hidden goods.

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

What does “Reasonable Force” imply?

To gain any entry. Bailiffs must 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.

Bailiffs Powers With A Limited Company – What is a warrant of control?

A Warrant of Control authorises Enforcement Agents (Bailiffs) to attend at the premises of the judgment debtor’s business. They collect money owed under the judgment debt failing, which removes goods from the business to sell at auction.

Do bailiffs work on weekends?

Yes.

Visits on 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 often work for courts, but also for HMRC.

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

Debt collectors are not bailiffs, and therefore have no specific powers to enter or seize goods.

What can HMRC Bailiffs take?

What can bailiffs, therefore, take from a limited company?

When wishing to collect monies ruled owing by the courts. Bailiffs may seize assets only owed by the debtor, a separate legal entity to the directors. Personal assets owned by others 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 not be 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. The director may then apply to the courts to issue an injunction, as they are illegally acting.

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.

Bailiffs Powers With A Limited Company. 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.

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

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

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

Controlled Goods Agreement.

A controlled goods’ agreement is applied to secure 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. However, they may not enter your home for a company debt unless you trade from your home.

Under certain circumstances. They are:

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

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

The limited company remains separate from an individual. Limited companies remain liable for their debts, not 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 repayment, they have the right to sell your company’s items and goods at a public auction. They are,however, then required to provide seven days’ notice before doing so.

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

Bailiffs attend and take from 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 whether 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 have you failed an HMRC time to pay? The HMRC officer usually instructs 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).

HMRC may issue a HMRC enforcement notice.

READ FURTHER: Clear HMRC Debt.

Bailiffs and Coronavirus COVID-19

Enforcement at commercial premises

Enforcement agents (Bailiffs) visiting a business premises should ensure they observe at all times any measures that the
Business has in place to ensure the safety of customers and workers. For further guidance, view COVID enforcement guidance.

Using your home as a Registered Office and Bailiff?

Nominating your company’s registered office at your home means you risk a bailiff turning up! Therefore, it is advisable to rethink this to avoid stress in that eventuality. 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, a voluntary arrangement maybe your best option when you cannot agree on a payment plan with a bailiff (acting on behalf of your creditor). However, If your cash flow will not fund repayments, or you prefer to 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.

Why do bailiffs not operate in Northern Ireland?

Bailiffs in Northern Ireland no longer exist. If a creditor has been unable to recoup his money, he may use a debt collection agency or continue the process by taking enforcement measures.

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 costs are extortionate.

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

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

If in doubt, seek professional help. Consult as soon as possible with a licensed insolvency practitioner to ensure stopping bailiffs. Contact HBG Advisory on 0330 056 3120. Trusted Company debt advice.

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

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