legal help please

[Fiza]

Hi guys

Some help is needed please. Here is the scenario

1 - I own a business that is registered to me
2 - I sell business to john who registers a company, put myself as a 1% shareholder, him and his wife as directors and his wife as 99% shareholder until he pays me in full where I will then resign as director
3 - He sells business to paul and agreement between him and I is that when Paul pays him in full, he will pay me what is owed and then we transfer the pty in full to paul and we resign as directors.
4 - paul does not pay him and runs up a bill with management
5 - paul also buys 2 vehicles on the company name( which he is not a director or shareholder of)
6 - paul tells sellers he is the owner of the business and gets a letter from management of the centre that he is the owner as they are unaware that he has not paid John for the business in full and they are unaware that the pty is still in my name and John and his wife's name
7 - Management has kicked Paul out as he has not paid rent and John takes the company back as he has not been paid.
8 - John then gives me the business for free on condition I pay the arrear rentals to which I agree
9 - John and his wife resign as directors and transfer all shares to me
10 - The pty (effectively me) is now being sued for the amounts for the cars that were not paid for by Paul which he bought under the company name
11 - I cannot afford a lawyer

What is my legal standing here

 

[Alton Turner Blackwood]

Your company is a juristic person and therefore a legal entity.

Your creditors have every right to sue, unfortunately.

 

[Grasmuis]

Why not sell the cars and settle the debt with the bank?

 

[Other Pineapple Smurf]

Asking for legal advice on public forums is bad, probably how you got into this mess in the first place.

 

[etwylite]

There is a lot more to this, but normally to incur debt, a board resolution conferring authority to an individual is required and has to accompany credit applications. If Paul misrepresented deliberately then that may be fraudulent and subject to criminal charges.

Suggest you find the money for legal consultation.

 

[AchmatK]

There is a lot more to this, but normally to incur debt, a board resolution conferring authority to an individual is required and has to accompany credit applications. If Paul misrepresented deliberately then that may be fraudulent and subject to criminal charges.

Suggest you find the money for legal consultation.

^ This

Was Paul appointed as a director and if so, was this updated with CIPC. If not, he cannot incur debt on behalf of the company without authority.

Get a lawyer and take on the banks that did the finance as well as they should have done their due diligence.

 

[Thor]

^ This

Was Paul appointed as a director and if so, was this updated with CIPC. If not, he cannot incur debt on behalf of the company without authority.

Get a lawyer and take on the banks that did the finance as well as they should have done their due diligence.

This.

 

[SauRoNZA]

5 HOW? Paul couldn't have Purchased said vehicles without being a director.

****

Signates already went there. I've never seen such a cluster **** in my life. How can you even agree to reselling something that wasn't paid for (sold) in the first place?

 

[SauRoNZA]

Asking for legal advice on public forums is bad, probably how you got into this mess in the first place.

Yup.

 

[Fiza]

Paul was never a director nor was he given any authority to purchase on company behalf.

The vehicles he purchased was not financed. He gave sellers fake proof of payments and then promises to pay but got the cars transferred and then sold them and never paid.

@YingYang I do understand that the company is a legal entity and a juristic person, but since Paul was never a director nor was he given authority to sign, surely the sellers are at fault for not checking if Paul was a director of company or given written authority to sign on behalf of the company.

For example an employee of Edgars (not a director nor given authority to purchase on Edcons name) buys a vehicle on Edcon's name but transfers it into his own name and then sells it without paying for the vehicle, surely Edcon cannot be held liable for the debt

 

[riscbroker]

Paul was never a director nor was he given any authority to purchase on company behalf.

The vehicles he purchased was not financed. He gave sellers fake proof of payments and then promises to pay but got the cars transferred and then sold them and never paid.

@YingYang I do understand that the company is a legal entity and a juristic person, but since Paul was never a director nor was he given authority to sign, surely the sellers are at fault for not checking if Paul was a director of company or given written authority to sign on behalf of the company.

For example an employee of Edgars (not a director nor given authority to purchase on Edcons name) buys a vehicle on Edcon's name but transfers it into his own name and then sells it without paying for the vehicle, surely Edcon cannot be held liable for the debt

Into whose name were the vehicles transferred/registered?

 

[etwylite]

Paul was never a director nor was he given any authority to purchase on company behalf.

The vehicles he purchased was not financed. He gave sellers fake proof of payments and then promises to pay but got the cars transferred and then sold them and never paid.

@YingYang I do understand that the company is a legal entity and a juristic person, but since Paul was never a director nor was he given authority to sign, surely the sellers are at fault for not checking if Paul was a director of company or given written authority to sign on behalf of the company.

For example an employee of Edgars (not a director nor given authority to purchase on Edcons name) buys a vehicle on Edcon's name but transfers it into his own name and then sells it without paying for the vehicle, surely Edcon cannot be held liable for the debt

Thats fraud and criminal, have the sellers or yourself opened a case against him?. I do not believe they would have standing against the company from the limited info you have provided.

 

[Alton Turner Blackwood]

/OT

If you quote post #10 please remove the @ in front of my nic in said postk, else I get a notification on my phone whenever that post is quoted.

Dankie baie

/OT

Back on topic, I think you need to get proper legal advice for this situation you find yourself in.