Tax Office hits Jim’s Plumbing franchise with wind-up order

The Australian Taxation Office has applied to wind-up Jim’s Plumbing, one of the several trade-based franchises run by entrepreneur Jim Penman under the well-known Jim’s Group banner, with a hearing set for the Federal Court on July 20.

Penman was contacted by SmartCompany this morning for comment, but was unaware the notice had even been filed. He has confirmed that Jim’s Plumbing has received the wind-up order and says he is now in the process of contacting the head of Jim’s Plumbing, David Ellingson, to find out more information.

The Jim’s Plumbing head office, which is based in Adelaide, was also contacted by SmartCompany but no representative was available for comment before publication.

Ellingson is named as the franchise’s managing director in a metropolitan franchise information document, which outlines a goal to have 100 franchises by the end of 2012.

Although details of the notice are unknown, the ATO’s solicitor says the notice originates from a failure to comply with a taxation-related demand.

“This notice is based on the failure of the company to comply with a statutory demand. It was issued before the proceedings, that wasn’t complied with and the deputy commissioner has made this next step,” says Hunt & Hunt solicitor Ben Williams.

“At this stage this is an action commenced with the Federal Court, and that action is seeking the company is wound-up in insolvency. “

Jim’s Plumbing was set up in 1989, and was first branded under the Jim’s Mowing name. But this was changed after a separate plumbing company called Metro Plumbing approached Penman with the idea of using his name to create a new franchise.

Williams says Jim’s Plumbing will have 21 days to comply from the day the notice was issued. If it does comply, the company could be wound up.

Penman is no stranger to legal action. A year ago he vowed to defend his company against a $5 million lawsuit from a former British franchisee, who lodged a statement of claim in the High Court in London against him.

This article first appeared on SmartCompany.