Running a limited company requires hard work, and it can sometimes prove challenging. If you own a limited company, there’s a lot you should be aware of, including County Court Judgements, as they could potentially affect you if someone takes action against your business.
If you own a limited company in the UK, we advise you to educate yourself on County Court Judgements and how to prevent one from being filed against you. To find out more, continue reading.
What is a Limited Company?
A limited company is privately owned, with just one main contractor who is legally responsible for any debts owed. All limited companies have their own legal identity (not including company directors or shareholders).
In the UK, it’s a requirement for limited companies to register with Companies House. When a limited company makes any money, the funds belong to the company, not the people involved.
Essentially, this means that both directors and shareholders are unable to take money out of the company when they want to. Limited companies pay Corporation Tax – the current rate for Corporation Tax is 25%, but this can change depending on how much profit you make.
For example, if your limited company makes over £250,000 in profit, you’ll need to pay the main rate of Corporation Tax. However, if your company has made less (£50,000 or less in profit), then you’ll pay a small profit rate of 19%.
County Court Judgements
What are County Court Judgements? A County Court Judgement (CCJ) is a legal decision that’s passed down by the County Court.
If your company fails to repay any money that’s owed, you’ll likely have a County Court Judgement registered against you. If any money owed by your company is left unpaid for more than 30 days, it could have detrimental effects on your company.
Several negative drawbacks come with having a CCJ registered against your limited company:
- A CCJ can stay on your company’s credit file for six years, affecting your credit record
- Your reputation will be damaged
- Your company’s ability to borrow from suppliers could be affected
Can You File a CCJ Against a Company in the UK?
Yes, you can file a County Court Judgement against a limited company in the UK. As discussed, County Court Judgements can be harmful to limited companies across the country.
A creditor can ask the court to issue a CCJ if they have tried all methods to make you pay your debts but failed to obtain the money. It’s important to pay off any debts in time to avoid further issues.
However, many limited companies fail to cooperate, leading to more problems. All creditors have the right to ask the court to issue a CCJ if they believe your limited company has no intention of paying debts.
The process of being issued a CCJ follows a few steps:
- The start of the CCJ process begins with you being issued with a County Court Summons
- You’ll have 14 days to respond (you can ask for longer if needed)
- If you fail to respond to the County Court Summons or come to an agreement, the court will issue a CCJ
If the unpaid payment is left unresolved for too long, the judgement could result in the compulsory liquidation of the company. Outstanding debts should be taken care of and paid in good time if you want to avoid legal action being taken against you.
Can You Refuse a County Court Judgement?
Refusing to pay your CCJ can lead to negative consequences, and it’s not advised. Refusing to pay your debts for no reason will likely lead to bailiff action and your business’s assets being seized.
However, you can apply to have the issued CCJ set aside or cancelled if:
- You’ve already paid your debt
- You believe that you don’t owe any money
- You didn’t receive anything about your CCJ from the court (this could be due to relocating, or they got the wrong address for you)
It’s understandable why some companies struggle to recover their debts. To maintain the financial well-being of your company, it’s key to stay on track by paying the debt.
How Can LJS Accounting Services Help Limited Companies?
At LJS Accounting Services, we offer a wide range of services to companies working in a diverse range of sectors. Our clients range from sole traders to limited companies. Our experience and dedication to helping our clients don’t go unnoticed – and it’s our longevity and in-depth knowledge that allows us to provide the best services to our clients.
Our bespoke accounting services and award-winning service have allowed us to work with many limited companies in the past. Trusted for over a decade, our experience is second to none. Our excellent reviews are a testament to our expert services.
We advise limited companies to work alongside a trusted and professional accountant. Avoiding issues, such as County Court Judgements, can be prevented by having an accountant handle your affairs. LJS Accounting Services helps grow your business and take care of the more tedious financial tasks.
We’ll Take Care of Your Accounts
It can be challenging to juggle different aspects of business, especially when you’re operating a limited company. Limited companies typically need some additional requirements, but we can appoint one of our account clerks to take care of them for you.
Your appointed accountant will act as a friend, leader and financial advisor. It’s easy to create distance from that entrepreneurial spark when you’re dealing with debts, which is why it’s beneficial to have an accountant working on your behalf.
With us handling your accounts, you’ll have more time to focus on other important aspects of your work life. You can rest assured knowing that your dedicated accountant is on hand to minimise any stress you currently have. Our friendly support, guidance, and advice are available at all times.
To find out more about our services available for limited companies or to ask us any questions, please don’t hesitate to get in touch today. We look forward to hearing from you and having a chat soon.
Keli Evans, Director at LJS Accounting Services, excels in taxation and statutory accounts. With a focus on strong client relationships, she leads a diverse portfolio, overseeing vital financial aspects like VAT, payroll, pensions, and taxation with a holistic and committed approach.
