Who is my debtor?

By admin

It sounds obvious, but working out who owes you the money is essential before you issue a demand letter or start court proceedings.

Generally, the person who owes you the money is the person who engaged you to provide the goods or perform the services. A good starting point is to review any written agreements, correspondence, purchase orders and invoices to identify who actually engaged you.

Individuals, companies and partnerships

Your debtor will usually be an individual or a company.

You can usually identify a company from the words “Pty Ltd” (private company) or “Ltd” (public company) in its name.

Where an individual (commonly known as a ‘sole trader’) has engaged you, they are responsible for paying you.

A partnership is a relationship between two or more individuals or companies. If you have been engaged by a partnership, you can usually pursue all the partners personally for payment.

Trading names

It is important to distinguish between the legal entity (e.g. the individual, company or partnership) who engaged you and the trading name they used.

Many legal entities conduct business under a trading name. A trading name is just a label, for example, “Get Paid Debt Collection” is just a trading name. You cannot sue a trading name – you must sue the entity behind it.

Investigate

You can better identify your debtor by making simple inquiries such as:

• Search their business name or Australian Business Number – businesses are required by law to include their trading name (if any) and ABN (if any) on any receipt or order for goods or services. You can find out who the trading name and ABN belong to on the Australia Business Register.
• Search the ASIC register for companies.

Need help?

We recommend you see us for a 30 minute consultation ($198) where we can review the documents and advise you on who to pursue. You can book a consultation online here.