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The plumbing company was incorporated in November 2011 and was located in St Albans, Herts. It had been formed after the previous incarnation had gone 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 and this was seen as a means to boost cashflow. The director’s main role was to provide quotes and oversee work and there were two engineers, an apprentice and an admin assistant 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 these. Some jobs were also done as subcontractors and these also involved errors. As such, the business was dropped as 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 having a nervous breakdown and this 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.