The Company Owes Me Money: What Should I Do?

In short

A claim against a company is looked at through the capacity, the document, and the choice of enforcement or of an action; it is not a copy of a partnership action.

It is looked at through the capacity, the document, and the choice of enforcement or of an action. It is not a copy of a partnership action.

A partnership disagreement stands apart.

It is looked at whether the invoice was issued to the company or to the partner.

Related articles: commercial collection.

The first practical order

1. Separate whether the claim is a wage, an invoice, or a claim to a share.
2. If it is employment, mediation; if it is commercial, a notice and proceedings are chosen.
3. Do not take the company and the partner as the same defendant; the capacity is looked at on the paper.

If you cannot obtain payment from a company, the first question is not "which enforcement proceedings should I start?", but which legal relation the claim rests on, and exactly which the debtor company is. An invoice claim, a loan that was given, a partner's current account, a dividend, and an employment wage are not pursued by the same route.

First gather the contract, the delivery, the payment, and the company information in a single file. If the due date has passed, a written request for payment, commercial mediation, enforcement, or the options of an action are compared according to the evidence and to the debtor's financial position. This text is general information with a focus on a commercial claim; in consumer, employee, or public claims, different rules of jurisdiction and of procedure may be applied.

Classify the source of the claim correctly

The amount of the debt and the competent authority cannot be chosen soundly before the basis of the claim that will be directed at the company is determined. There may be more than one legal relation with the same company. For example, you may both have sold goods and, as a partner, have lent money to the company.

The principal sources of a claim are these:

• A contract for the sale of goods or of a service
• An invoice and a current-account relation
• Money lent to the company
• A partner's current account
• A dividend
• The price of a transfer of a share
• A penalty clause or compensation
• A rent claim
• A negotiable instrument
• A court or arbitral decision

The condition of falling due, the interest, the proof, and the application of each source may differ. While a general-assembly decision carries importance for a dividend, in a sale of goods whose due date was determined the records of delivery and of the invoice come to the fore. The non-payment of an employee's wage is not a commercial claim, but an employment-law dispute.

Determine the correct debtor company

Directing a claim at the wrong legal person, because of group companies, brands, and branches, is an error often met. The brand seen on the commercial sign may be different from the company in the contract. The invoice may have been drawn up in the name of one group company, and the bank payment in the name of another.

The following records should be compared:

• The trade name in the contract
• The tax and MERSİS information
• The company that issued or received the invoice
• The authorised person who gave the order, and the domain of the email
• The recipient on the delivery document
• The account that made the previous payment
• The centre and the representatives in the trade registry

In a transaction made in the name of a branch, the debtor is generally the legal person the branch is attached to. A dealer or a franchise business may not be the same company as the owner of the brand. Directing a notice, mediation, or proceedings at the wrong debtor gives birth to a loss of time and of cost.

If it is alleged that more than one company is a debtor together, the contractual or statutory basis of joint and several responsibility should be shown. Being in the same group does not by itself make all the companies debtors.

The chain of documents that shows the claim arose

The invoice is an important starting document, but it does not prove the underlying transaction by itself in every situation. The delivery of the goods, or the completion of the service, should be shown separately. The claim file should be built as a chain extending from the contract to the due date.

The chain of documents may follow this order:

• The offer and the order
• The contract or the framework agreement
• The records of delivery, of the waybill, or of the service
• The record of acceptance, or the performance report
• The invoice and the information of transmission of the e-invoice
• The current-account statement and the reconciliation
• A partial payment
• The due date and the request for payment
• The debtor's correspondence of acceptance or of objection

An objection not being made to the invoice may give birth to an effect of commercial proof as regards acceptance of the content. Despite this, if there is an allegation that no delivery was made at all, the underlying relation is examined. In the e-invoice system, transmission is not the same thing as the actual performance of the goods or of the service.

A current-account reconciliation and an acceptance of the debt may be strong evidence. Whether the document was signed by an authorised person, and the movements up to which date it covers, should be checked.

The calculation of the due date and of falling due

If proceedings are started before the claim has fallen due, the debtor may object with right. The due date may be bound in the contract to a particular date, to a number of days after delivery, to the date of the invoice, or to the record of acceptance. If the condition has not occurred, the debt may not have fallen due yet.

In the calculation of the due date, attention is paid to the following subjects:

• The separation of a calendar day or a business day
• The date of delivery and of acceptance
• The date the invoice reached
• The effect of a partial delivery
• A system of advance payment or of progress payment
• The period of objection in the contract
• An email that contains a change of the due date

The parties may have changed the due date continuously in practice. A one-time postponement and a lasting change of the contract are not the same. A promise of payment given by an unauthorised employee may not bind the company either.

If the due date is uncertain, the debt becoming due with a suitable request for payment, or the conditions of default, are assessed. The date of the notice may also carry importance from the side of the start of interest.

A written request for payment, and default

The request for payment should show clearly the basis of the debt, its amount, and the due date. There are rules of form in a notice of default among merchants; methods such as a notary, a registered letter, or registered electronic mail with a secure electronic signature are chosen according to the concrete proceeding.

The following information may be found in the text of the notice:

• The information of the party and of the contract
• The invoice or the items of the claim
• The amount of the principal claim
• The previous partial payments
• The due date and the date of default
• The bank account for payment
• The basis of the claim for interest and for cost
• The last period that was given, and the next route

Adding an exaggerated or unfounded penalty clause may lead to the debtor refusing the whole claim. First the undisputed principal claim and the other items should be separated. If the debtor objects, the reason of the objection, and the amount they accept if there is one, may be asked for in writing.

The type of interest and the starting date

In a commercial claim, contractual interest, default interest, and statutory commercial interest may differ. Whether the parties are merchants, the commercial character of the transaction, the rate in the contract, and the mandatory limits are examined. In a claim in foreign currency, the currency and the form of payment are also important.

The start of interest is most of the time bound to the due date or to the date of default. If the due date is not clear, the date of the notice may play a role. The day the invoice was drawn up is not always an automatic start of interest. When a partial payment is made, the order of set-off and the remaining principal should be calculated.

In a mediation or an action, stating the type of interest and the starting date is useful, instead of only saying "with its interest". A wrong rate being claimed does not remove the principal claim; it may give birth to a debate on the calculation and on the litigation cost, however.

The separation of the partner's current account, the debt, and the capital

A company partner may have sent money from their personal account to the company. If the accounting showed this in the account of debts to partners, the allegation of a claim is supported. The legal character of the payment is not determined only by the account code, however.

The money may have one of the following characters:

• A loan given to the company
• Performance of the debt of contributing capital
• An advance of capital
• An expense made in the company's name
• Temporary financing
• The price of a transfer of a share
• An allegation of an advance from a dividend that will be distributed

An amount contributed as capital cannot be asked back like an ordinary debt. For a dividend, a distributable profit, the balance sheet, and a general-assembly decision are needed. A documented expense the partner paid in the company's name may give birth to a claim of recourse or of a current account.

If there is also a partnership disagreement, the assessment should be made together with the frame of a dispute among company partners. A money claim and the right of shareholding should not be mixed with each other.

Commercial mediation

In commercial claims and actions for compensation whose subject is the payment of a sum of money, mediation is as a rule a condition of the action. The application should be completed before the action is opened. Starting enforcement proceedings is a different procedural step; in the action that will be opened after an objection, the condition of mediation may come onto the agenda.

In the application form, the correct company trade name and the items of the claim should be stated. The principal claim, the interest, a penalty clause, and compensation may be separated from each other. If there is more than one debtor, the basis of the responsibility of each should be shown.

Preparation for the meeting may be made with the following documents:

• The contract and the annexes
• The invoice and the delivery records
• The current-account statement
• The list of partial payments
• The notice and the debtor's answer
• The current calculation of the debt
• The security documents

If an agreement is made, the instalments, the security, the interest, the cost, and the result of a due date being missed should be written clearly. The signature of the authorised company representative should be checked.

The options of enforcement proceedings

For a money claim that is certain and has fallen due, proceedings without a judgment by the route of a general attachment may be thought of. If the debtor objects to the payment order within the period, the proceedings stop. The creditor may apply, according to the document they hold and the rules of jurisdiction, to routes such as the lifting or the annulment of the objection.

If you have a cheque, a promissory note, or a bill of exchange, the route of proceedings particular to negotiable instruments may come onto the agenda. The conditions of form of the instrument, its due date, presentation, and limitation should be examined separately. If there is a court decision or an arbitral decision, the route of enforcement under a judgment may be used.

While the route of the proceedings is chosen, the following questions are assessed:

• Is the claim a money debt?
• Has it fallen due?
• Which document do you have?
• Is the debtor's objection expected?
• Is there a security or a pledge?
• Where is the competent enforcement office?
• Is there a risk of limitation?

The debtor's objection to the enforcement proceedings may stop the proceedings; for this reason the plan of the action and of the evidence before the proceedings should also be prepared.

The action for the claim, and proof

If the source or the amount of the claim is contested, an action in the commercial court may come onto the agenda. Jurisdiction is determined according to the capacity of the parties as merchants and to the commercial character of the transaction. There may be arbitration, or a valid jurisdiction clause, in the contract.

In the petition, the chronology of the event, the items of the claim, and the evidence should be built clearly. Instead of writing only the total of a large number of invoices, a table of the invoice, the delivery, the due date, and the remaining debt may be added. The commercial books and the electronic records may be the subject of an expert examination.

The commercial books of the parties being kept in proper form, and the records confirming each other, play a role in proof. A unilateral accounting record is not enough in every situation. A confirmation email of the other side, a reconciliation, or a partial payment may support the underlying relation.

In uncertain claims, the type of action and the amount of the claim should be chosen according to the rules of procedure. Building an unnecessarily uncertain claim while a calculation can be made may give birth to a problem of litigation cost.

Provisional attachment, and managing the collection risk

If it is thought that the debtor is disposing of their assets, or that their ability to pay is deteriorating quickly, a provisional attachment may be assessed. For this, the character of the money claim, its due date, and the statutory conditions are examined. An abstract worry of "the company will fail" may not be enough.

For approximate proof, the contract, the acceptance of the debt, the invoice, the delivery, and the history of payment may be used. The court may ask for security. Because a wrongful provisional attachment may lead to a claim for the debtor's loss, it should not be used as a tool of pressure against a rival.

In claims that have not fallen due, a provisional attachment is bound to more limited conditions. Special situations, such as the debtor not having a place of residence, or making preparations for the purpose of escaping their undertakings, may be assessed. An interim measure and a provisional attachment do not give birth to the same results.

The personal responsibility of the company partners and of the managers

In limited and joint-stock companies, the legal personality of the company is separate from the partners. Directing proceedings at the partner's personal assets for the company's debt is as a rule not possible. The special provisions of responsibility relating to the partner's capital debt and to public claims are reserved.

When a manager signs the contract in the company's name, they are not counted as having entered a personal debt. If they also gave a surety, an aval, or a personal security, however, the form and the scope of the signature are examined. A tort, or responsibility for trust, may also give birth to a different result in the concrete event.

A sole proprietorship is the natural person themselves; even if they operate under a trade name, the debt belongs to the natural person. In an ordinary partnership, the arrangement of the partners' responsibility is different from a capital company. For this reason the type of debtor should be confirmed before the proceedings.

If the company is in difficulty of payment

If the company says "there is no cash", the debt does not end; the strategy of collection changes, however. The records of attachment, changes of capital and of address, the state of activity, an announcement of a concordat, or a record of liquidation may be checked. The trade registry and the official announcements provide current information.

If an instalment agreement will be made, the debt should be accepted clearly, and security should be taken if possible. The legal and economic value of the options of a pledge, a surety, a negotiable instrument, or a bank guarantee are compared. The authority and the assets of the person who gives the security are also important.

If a concordat moratorium was given, the prohibitions of proceedings and the rules of notification of the claim may come into play. In bankruptcy, registration of the claim with the estate is needed. Insisting on ordinary enforcement proceedings may not give a result. In a company in liquidation, the liquidator and the announcements should be followed.

Limitation, and management of the period

Different periods of limitation may be applied according to the type of the claim. An invoice, a sale, rent, a mandate, a negotiable instrument, or a court decision is not subject to the same period. The due date, and the reasons of interruption or of suspension, need to be determined.

An oral promise of payment may not always be counted as a valid acknowledgement of the debt that affects limitation. An acceptance made in writing and by an authorised person is stronger. A partial payment may also carry importance from the side of acceptance of the debt.

The effect of a mediation application on the period should be recorded with the starting and ending dates. Sending a notice does not interrupt limitation in every situation. For this reason, waiting for years on the company's word of "we will pay next month" is risky.

Errors often made

In the collection of a company claim, the following errors are widespread:

• Taking the brand as the debtor company
• Accepting the invoice as the only and undisputed evidence
• Starting proceedings before the due date has come
• Showing the group companies as debtors together without a basis
• Mixing the partner's current account with the capital
• Thinking that the notice interrupts limitation in every situation
• Missing the periods after an objection to the enforcement proceedings
• Not building a provision of security and of falling due in the instalment agreement
• Making direct personal proceedings against the company partner
• Not checking the announcements of a concordat or of liquidation

In the collection process, a threat, a public exposure, or pressure being put on the company's customers may create a new legal responsibility. The official and measured routes of application should be used.

Where a company claim is read

A company claim is read from the invoice, the contract, and the current-account record. An amount and an interest rate that are not written in the file are not added. An Ankara lawyer separates, from the debtor's record, that the office being in Çankaya does not choose the competent authority. A partnership action is not counted as a copy of this claim.

• Determine the legal source of the claim.
• Confirm the correct company trade name and the information of representation.
• Build the chain of the contract, the delivery, the invoice, and the payment.
• Prepare the calculation of the due date, the principal, and the interest.
• If needed, send a payment notice in a valid form.
• Check the company's financial position and the securities.
• Complete the mediation that is a condition of a commercial action.
• According to the document, choose enforcement proceedings, an action for the claim, or arbitration.
• If the collection risk is close, assess a provisional attachment.
• Follow separately the periods of the objection, of the concordat, and of bankruptcy.

A more comprehensive comparison of method is in the content how is a commercial claim collected?, and the general frame of the contract and of the company relations is on the page commercial law.

This text is general information. The source of the claim, the type of the debtor company, the contract, the current legislation, and the collection risk should be examined together in the concrete file.

Conclusion

This article is for general information. The document, the period, and the procedure of the concrete event should be read separately; there is no promise of a result from memory.