Businesses and legal responsibilities after closing
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free skin care · Mon Jul 13, 2009 8:07 pm

Sorry, please delete if this is a no-no topic but I'm desperate. I'm having a legal issue and hoping someone can refer me to any legal type sites or forums that I can visit to get an answer. Long story short, we had a new roof installed in 2005, it leaked, owner wouldn't come back and we had to get an entire new roof put on (wrong type was installed) and now we have taken them to small claims (we're in Ontario, Canada). My issue is that we did a business name search that was on the invoice and sued the registered owner. Name was in wifes name, but we dealt with the husband who operated the business. Only problem is that the wife closed the registration 5 months prior to her husband installing the roof, yet her husband was still doing work under that name. She is telling the court that the business was transferred to her husbands name in 2004 (the name search we did in 2007 did not show this) and submitted a name search for a totally different name opened by her husband in 2006. So basically it appears that they were doing work from early 2005 to early 2006 under the closed business name, yet they were not registered. Is this legal, and is the original owner (the wife) still responsible for damages even though the business name was closed prior to the work? I have tried googling but nothing about this is coming up, only lots of info on how to register a business. I am clueless at this and our lawyer is no help, he's the one that put her name on the claim in the first place!

Tue Jul 14, 2009 1:39 am

In California (not sure for all of the US), you need to have a Contractor's License to make major repairs like replacing roofs. If you knowingly hire someone who is NOT licensed, you assume liability and can't really retaliate through the legal system. If you are mislead by the person doing the work into believing they are licensed when they are not, then it turns into a gray area. Courts have known to side with the principal hiring the contractor when the contractor has mislead the principle whom is hiring them. I am a licensed Realtor and I've completed classes regarding agent principle relationships (especially relationships with licensed contractors since we deal with them a lot in my business). I would contact the city or government branch issuing the business license to see what legal rights you have in your situation. If you have invoices with their business name on them, you might be able to prove they were doing business that wasn't legal in your area and you were mislead into believing they were operating legally. You might also have right to some form of free counsel or legal advice. I know my county offers 30 minutes of free legal advice through a special program where you let them know the nature of your question and they pair you up with a lawyer who is knowledgeable or works in that field of law; since Ontario is a metropolitan area, I wouldn't be shocked if they had legal advice options in your area and a second opinion never hurts. I'm not trying to give you legal advice but I'd urge you to look into what your options are.

free skin care · Tue Jul 14, 2009 5:48 am

what a paint for you!! I have had bad house renovation troubles and I empathize. re the legal idea offered by Rockalilly, in Ontario there is the Law Society of Upper Canada who used to offer free half hour of legal advice and I think it is now $60. I don't have their # at home with me but you can look it up on line or call 211 the Toronto area social service info line. HTH and good luck.

free skin care · Tue Jul 14, 2009 10:11 am

You could casually mention to this multi-company name scamster that you're "considering" reporting them to the IRS/tax authority, whatever it is in Canada. Just a guess, but I suspect they have much more to fear from a tax audit than a consumer complaint lodged in a small claims tribunal.

If you can't work out who you've paid, is it likely any company/entity has paid tax on this amount? Or the sums they've charged possibly many others for substandard work?

I'm not a fan of reporting misdeeds to government authorities, but if someone is trying to screw you over like this there's no point playing nice ...

free skin care · Tue Jul 14, 2009 10:57 am

Can't help you on the legal aspects Diana, but you could check them out on Homestars.com (an invaluable site for screening out duds) and write a scathing review of their "services".

free skin care · Tue Jul 14, 2009 1:35 pm

Diana P wrote:

Only problem is that the wife closed the registration 5 months prior to her husband installing the roof, yet her husband was still doing work under that name. She is telling the court that the business was transferred to her husbands name in 2004 (the name search we did in 2007 did not show this) and submitted a name search for a totally different name opened by her husband in 2006. So basically it appears that they were doing work from early 2005 to early 2006 under the closed business name, yet they were not registered. Is this legal, and is the original owner (the wife) still responsible for damages even though the business name was closed prior to the work. I have tried googling but nothing about this is coming up, only lots of info on how to register a business. I am clueless at this and our lawyer is no help, he's the one that put her name on the claim in the first place!

Hi Diana!

I can tell you right off the bat that it is totally illegal to operate under a business name that is not registered in Ontario. This includes a business name that has been unregistered or one that had a registration and it expired (business registrations in Ontario must be renewed every 5 years). I do not know what the legal recourse is if someone gets caught or is sued while operating an unregistered business, but any good lawyer definitely would!

Before you contact another lawyer (your current one sounds inept, unfortunately Crying or Very sad

), I would try to gather as much factual info as possible on your own about this couple and the business in question. For example, if the wife told the court that the business was transferred to the husband in 2004, this can only happen if the business was registered as a Corporation. If the business was registered as a sole Proprietorship or a Partnership, she CANNOT transfer anything and must un-register the business name in order to have her name removed and prevent any future liability against herself. If the husband wishes to keep the business name that the wife just unregistered, he can do so and re-register it under his own name. Please keep in mind that there is no law that says that you have to continue using the same business name once you un-register your previous business name, so if the husband wanted to register another business name he is entitled to do so and this is completely legal.

What I would do is perform my own business registration searches once I was 100% sure of the business name, etc. Contact these sources for help on how to do this on your own. Don't overlook the possibility that they lived or registered a business in another province.

** Do you know the legal name of the person or business you wish to sue and their current residential or business address? You will need correct information about whom you are suing to properly prepare and serve your claim, and to enforce a judgment if you are successful. For information on how to search a corporation or registered business name, you may contact the Companies Helpline, Ministry of Government Services. Please note that there is a fee for the search and the search will not be conducted over the phone. The Helpline can be reached at (416) 314-8880 or toll free in Ontario at 1(800) 361-3223. Before requesting a search, you must have the exact name of the corporation or the Ontario corporation number, or the exact name of the registered business.

excerpt is fromwww.attorneygeneral.jus.gov.on.ca/english/courts/civil/civilcases-SEC_03.asp

As for a new lawyer, I would try the following resource with the Law Society and see where it leads. There is a $6.00 fee for this referral service but it also includes a 30 minute free phone consultation with a lawyer. If you've done your homework about this lousy roofing business and the owner(s) and written out the most important questions you have, you may gain some valuable info from this free consultation (I can't promise this is the case though, as I've never used this service myself - but I would give it a try if I were in the same boat!).

** The Law Society of Upper Canada offers public legal information, including how to find a lawyer. The Law Society of Upper Canada also offers a Lawyer Referral Service that parties can call to get the name of a lawyer who will provide up to one half hour of verbal consultation for free. While the legal consultation is provided at no cost, there is a $6.00 fixed charge for each call to the Referral Service.

info fromwww.attorneygeneral.jus.gov.on.ca/english/courts/civil/civilcases-SEC_02.asp

Best of luck in nailing these idiots!!!!!

~Scots

free skin care · Wed Jul 15, 2009 1:46 pm

Hey Diana - Just thought I'd add another link that explains what the difference is between a sole Proprietorship and an Incorporated business.
www.docstoc.com/docs/3289165/Registering-a-Business-Name-Ontario-businesses-may-register-a-business

Here is another important legal document that outlines what is contained in the Ontario Business Names Act. Unless a person is running a business (specifically, sole Proprietorship) under their own personal name, ie., John Smith, this act clearly shows that a person may be charged with an offence or fined under the law if they operate a business using any other name that is not registered in Ontario.
www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90b17_e.htm

HTH's!

free skin care · Wed Jul 15, 2009 5:39 pm

You might also want to contact your local TV news station or network affiliate, and get in touch with the consumer reporter that investigates these kinds of scams. They're usually successful at getting results.

I don't live in Canada, but here's a link. 'Award winning investigative reporter' according to Global TV bio.

Good luck!

www.globaltv.com/globaltv/ontario/personalities/Sean+Shea/767394/story.html

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