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TexLaw, Attorney
Category: Legal
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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I have been unwittingly trading a paypal account which was

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I have been unwittingly trading a paypal account which was in a uk company name for the past 2 years. I used to own the company but then went it alone. At that time I requested that paypal change this to a sole trader account and never chased this up with them which I admit was incompetence on my part. They have never acknowledged receipt of this request. The company name on the paypal account is in such small writing at the top of the page that I cannot read it without glasses and in any case when logging into my paypal account I always scrolled straight down to the transactions further down the page anyway, so I assumed it had been done. I genuinely wasnt aware of a problem until I only looked closer when the opened an investigation into another account (a trading as account with no issues and correctly registered) I had with them citing that I would need to clear up the issues with this account prior to them returning my second account to trading status. I replied explaining that I had contacted them and received a standard reply stating that they were investigating. A few days later they limited both accounts permenently citing "This measure is necessary to protect against the risk of bad customer experiences and financial losses, in view of certain activity related to your account that we have reason to believe has taken place." - I have never had a single issue in 10 years of trading and have always done everything in an honest and above board manner so this part of it is nonsense. It obviously all boils down to the fact that the paypal account was in a company name and shouldnt have been. In fact
I could have used the second account for all transactions - I only kept the first one because it was linked to some bill payments which I could have switched over in 10 minutes. There was no motive for my actions beyond convenience. I of course never used the company name at point of sale, this paypal account was only used to process payment ONCE a sale had been agreed so the paypal account could have been in the name joebolggs, it didnt really matter. Again I was completely unaware that I was doing anything wrong and everything that I did was above board - until now of course that I realise Ive been trading this account in a company name for 2 years (company has since closed down) - when it should have been in a sole trader name. It can never be shown that I was doing this to rip anyone off, I have always been honest. It was an oversight and incompetence but Im not sure how the law views it if it ever gets to that stage. Would they see it as fraud and what is the worst that could happened to me given that no intent can be shown ? Have I unwittingly commited fraud? Are we looking at a criminal record or worse, prison?
Thank You for your opinions
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To be accused of criminal fraud you would have had to actually defraud someone. Doing business in the name of a corporation while not being incorporate can only be counted as a fraud if you caused someone damage. So for example, if you entered into a transaction where their reliance on you as a company played an integral role to the transaction, and the transaction when awry, then you would potentially have a fraud issue.

Nevertheless, fraud, in terms of the criminal law, is reserved for circumstances where a person with intent, deceives another and deprives that person of property or money.

Paypal is taking the action of closing your accounts because they believe that it is misrepresentative for your customers to have believed that they were dealing with a corporation. However, this does not rise to the level of criminal activity. Further, unless some damage was done to one of your customers because of the accidental misrepresentation, there is likely no civil liability as well.

In short, it is my opinion that you are in the clear and can rest at ease.

If there is any further issue regarding this matter you would like me to address, please feel free to reply back and let me know.

Best of luck,
Zachary D. Norris
TexLaw and 8 other Legal Specialists are ready to help you

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