The plumbing company was incorporated in November 2011 and was located in St Albans, Herts. It was formed after the previous incarnation went into liquidation, and the director bought the name and goodwill from the previous liquidator so that he could keep the trading name going.
The director’s first move was to reduce overheads, so staff levels were cut, which was seen as a means to boost cash flow. The director’s main role was to provide quotes and oversee work, and two engineers, an apprentice, and an admin assistant were employed.
Poor standards prove costly
The two engineers did not always work to a satisfactory standard, and on occasion, they made mistakes that meant having to return and rectify them. Some jobs were also done as subcontractors, and these also involved errors. As such, the business was dropped as a subcontractor and was also generating too many complaints.
Overall, the company did not have enough work, the engineers’ wages were often late, and motivation was lost. The pressures contributed to the director’s nervous breakdown, which led to temporarily ceasing trading.
The Solution
In addition, the firm’s accountants had also not been paid for any work and so they put a block on real time submission for PAYE information. The director knew that the company could not reopen and the engineers were dismissed without notice. On meeting with Company Debt, the only workable option was for the business to be placed into Creditors’ Voluntary Liquidation.
