How soon do you need to register a company/proprietorship before trading as such ?

T

trajan

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A business I knew in the early 1970s started a Japanese motor dealership outside Dublin. On the face of it, all was sound. They had a local businessman already successful in export trading and retailing as the active head of the business. Locally recruited people filled in the positions for service mechanics, motor electricians, accounts clerk, etc. A new showroom was built and dealerships for two major Japanese car marques obtained. A plug article in the regional paper provided the publicity and much was made of the fact that Japanese cars were very fuel-efficient.

Six month later another local man related to the businessman obtained a county-wide franchise from a national distributor of oils, i.e. petrol, diesel, heating oil and engine lubricants. This business was operated by the second man and directed by the two men. It was run from the same site as the motor dealership, i.e. there were pumps and underground storage tanks at the front of the showroom and within it a separate office for the oils business.

The motor dealership failed in about two years from its launch. Its MD was in serious trouble with regard to creditors and lost the dealerships. However the oil distributorship remained going, expanded and thrived in the following 30 years of hard work by the second businessman.

Despite trumpeting the names of the two businesses in newspaper plugs, "congratulatory" ads in the paper beside other events, sponsorhips to sporting events, etc, I can find no record of either of the two business names in CRO records before the demise of the dealership. I checked older companies in the CRO records just in case their records didn't go back to the early 70s. But I had no trouble getting 1960s incorporated companies/proprietorships.

I found business name and incorporation records for the name of the oils business but these were for a year and two years after the demise of the motor business.

My tentative conclusion is that the motor dealership was not incorporated under its public name. More likely it was made a part of the owner's other businesses. The downfall was likely affected by supply and demand issues related to the oil crisis and Yom Kippur fallout that year. These would also have affected the owner's export trading business. Peter may have been robbed to pay Paul and vice versa, leading to the collapse of his affairs.

My question is how could someone obtain a motor dealership without clear evidence of incorporation of the business, let alone trade for two years in its absence using invoices with a non-existent company/business name printed on them ?

Can such things occur today ?
 
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T McGibney said:
By operating as a sole trader, or as
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@T McGibney

Well, I checked both business names and companies against the publicly advertised motor business name. No CRO record of either kind.

Of course that would not prevent the owner creating a different business/company name and putting dealership accounts through this.
This new entity could have been part of the owner's group company or simply a separate company wholly owned by him. I suppose excuses could be made about the name being different to that printed on the business' commercial stationary, e.g. it being too similar to an existing company name and an intention to iron this matter out "later" with Companies House.
 
Would the question of having a company/proprietorship registered before trading - or within a stated period after trading commencement - be given in the Companies' Act in force at the time, I wonder ?

Looking at the Companies Act 1963, it says in Section 22 that when the company trades under a name other than its own, it must register that business name as one normally does. That clearly had not been done in the case described.

It's clear that anyone with a dealership had to limit their liability. But what the company name used was remains to be determined.

I wonder if records of insolvent company proceedings are available to the public.
 
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T McGibney said:
Maybe the lack of a business name registration was no big deal in the 70s?
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This.

The law at the time required you to register your business name within one month after you have started to use the name in business (which is the answer to the question raised in the thread title). But I suspect that, back in the 1970s, if you were in breach of this obligation but nobody complained about it, the CRO would not be proactive in taking enforcement action. The CRO wouldn't even know about it unless a complaint were made.

trajan said:
My question is how could someone obtain a motor dealership without clear evidence of incorporation of the business, let alone trade for two years in its absence using invoices with a non-existent company/business name printed on them ?
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You didn't have to register your business name until after you actually started carrying on business, so at the time when you are approaching the Irish distributor looking for a dealership, this is something still on your to-do list. The distributor is unlikely to make it a condition of granting you a dealership that you should register your business name; they already know who you are, so they don't need to rely on registration to identify you.
 
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@TomEdison

What you say makes some sense.

Both businessmen involved had little more than primary schooling and relied on wives, sisters, etc to do the business' paperwork. The obtuse 1963 Companies Act in force at that time was unamended till 1977, two years after the collapse.

The absence of registration records for the oils distribution business suggests that the first businessman had not submitted forms for this company either. After the collapse in 1975 the oils business formally submitted registration of the business name they had used for 2 years previously. A year later they incorporated it as a Ltd company.

I'm not suggesting that non-registration of a business/company name brought down a great enterprise; clearly it was whatever practices led to insolvency and disappointed creditors that called time on it. But if known to be so, the absence of registration long after the grace period would be a poor sign. Likewise with the registered office provision of the 1963 Act.

The real lesson from this collapse is that no business person, however successful they be in other arenas, should be awarded a car dealership if they do not have a commercial background in the motor trade and if they do not intend to give it 100% of their working day. Car sales may be thick margin compared to other lines of business. But the cumulative work that goes into making a successful sale can be immense. There is no way that any kind of "comedy of manners" routine will sell cars long enough to keep a dealership going profitably.
 

I am glad that you spent so much of your time crafting a suitable thread title to reflect the core point of your thread.
 
Brendan Burgess said:
You are asking the question over 50 years late!

If you are concerned about a current business operating without registering then ask about current practices
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It's important to learn lessons from a debacle that drained the morale of many local people who left good jobs with main dealerships to join this new small dealership and then lost their job, car, career momentum and above all most of their public- and self-regard within 2 years. Even if it was someone else's business and over 50 years ago.

How often we see in Ireland a national agency/distributorship being awarded to someone with neither technical competence nor commercial experience in that sector but who just happen to have access to the required capital. The curious thing is that were such national agencies offered in a continental Europe country, the candidate would be strictly excluded from consideration without the foregoing two attributes. The older I get the more I see in this situation a strong whiff of economic conspiracy. I also think that there is a role for the state authorities in this matter.
 
trajan said:
How often we see in Ireland a national agency/distributorship being awarded to someone with neither technical competence nor commercial experience in that sector but who just happen to have access to the required capital.
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No idea. Care to elucidate us? Specific examples would be useful. Maybe in the recent past rather than half a decade ago?
 
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