- Original Poster
- #1
Situation:
Ltd company, 2 directors, 1000 shares split 50/50, long software development period funded entirely by large director loans, no other debts at all. The loans are shown (in the latest accounts) as amounts falling due within one year.
Software development period coming to an end and close to launch (and about bleedin' time, too!) but the company is obviously technically insolvent at this moment in time due to the lack of revenue and large director loans.
Problem:
We are somewhat concerned that initial sales efforts may be unfairly hampered by the seemingly-dismal financial status, despite the fact that for obvious reasons neither Director is actually very likely to be demanding their money back - at least until the company is perfectly capable of repayment without any problem.
Options:
1. Simply hope it won't make too much of a difference to early sales before the end of November (our year end), then submit those accounts very quickly as we expect (hope) our finances will at that point show the company in a much better position - or at least no longer technically insolvent.
2. Defer (?) some or even all of the company debt for 3 or perhaps 5 years, to show intent.
3. A share issue (?) to effectively wipe out some or all of the debt.
...Any other options of which I'm unaware?
(NB: Some of my layman's terminology may not be quite accurate, but I'm sure the smart people know what I'm talking about in each case!)
We do have an appointment with our own accountant in mid-November, prior to our year end, to discuss these and other matters, but lately the potentially harmful effect of our seemingly-insolvent current financial position has weighed quite heavily on my mind - hence writing this at almost 1am.
I would very much welcome some advice, and perhaps a brief analysis of the main pros & cons of each of the above options (and any others I may have missed).
In particular, how much difference would option 2 make to an "outside perception" of our finances as viewed through Companies House, in comparison to option 1?
Many thanks.
Ltd company, 2 directors, 1000 shares split 50/50, long software development period funded entirely by large director loans, no other debts at all. The loans are shown (in the latest accounts) as amounts falling due within one year.
Software development period coming to an end and close to launch (and about bleedin' time, too!) but the company is obviously technically insolvent at this moment in time due to the lack of revenue and large director loans.
Problem:
We are somewhat concerned that initial sales efforts may be unfairly hampered by the seemingly-dismal financial status, despite the fact that for obvious reasons neither Director is actually very likely to be demanding their money back - at least until the company is perfectly capable of repayment without any problem.
Options:
1. Simply hope it won't make too much of a difference to early sales before the end of November (our year end), then submit those accounts very quickly as we expect (hope) our finances will at that point show the company in a much better position - or at least no longer technically insolvent.
2. Defer (?) some or even all of the company debt for 3 or perhaps 5 years, to show intent.
3. A share issue (?) to effectively wipe out some or all of the debt.
...Any other options of which I'm unaware?
(NB: Some of my layman's terminology may not be quite accurate, but I'm sure the smart people know what I'm talking about in each case!)
We do have an appointment with our own accountant in mid-November, prior to our year end, to discuss these and other matters, but lately the potentially harmful effect of our seemingly-insolvent current financial position has weighed quite heavily on my mind - hence writing this at almost 1am.
I would very much welcome some advice, and perhaps a brief analysis of the main pros & cons of each of the above options (and any others I may have missed).
In particular, how much difference would option 2 make to an "outside perception" of our finances as viewed through Companies House, in comparison to option 1?
Many thanks.
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