Is he liable ?????????

[bambolauk]

My brother purchased a company in 2004 the purchase agreement was that my brother acquired 100% share capital for a fixed price and the agreed payment terms was to pay off the agreed price over a 3 year period of 6 equal instalments, during this period the vendor invoiced the company that my brother had purchased and the invoices where settled in full by the company, however the company ceased trading in October 2006.the original vendor has now contacted my brother personally and is demanding full settlement of the final remaining instalment. My brother informed him that the company is no longer trading and he is insisting that He pays personally for the remaining instalment, IS He liable? Please advice !!

[MustafaTickl]

As your brother purchased all of the share capital personally then your brother is liable for the remaining instalment. If after purchase your brother dumped the company in the middle of the ocean, changed its name and country of registration, immediately sold it to someone else, stopped trading straight away or sent it to the moon it would alter nothing, your brother is liable for full payment. The fact that the vendor invoiced the instalments to the company name and was paid in the company name alters nothing, it is only a matter of convenience and does not void the basic contract.

[Finance Guy]

As much as I hate to admit it, Mustafa is right