Winding Up A Company Statutory Redundancy Pay

[JJL]

Hi all, I’m wanting to wind up my Limited company, debts are very small. But the business owes me around £6000 that I’ve loaned it over the years. Can I wind up the business as the only person owed money and then claim Statutory Redundancy Pay from the government?

Thanks

 

[ChrisCallaghan]

Hi @JJL ,

A director is entitled to claim redundancy, unpaid wages etc from government if their company enters into liquidation, but a director cannot claim funds they have loaned to the company.

There are specialist companies who can assess director's claims in liquidation, so it may be worth contacting such a specialist.

You will also want to factor in the cost of a liquidation into your considerations. A typical Voluntary Liquidation will cost between £4,000 - £5,000.

 

[Scalloway]

You can dissolve the company if you are the only creditor. As I understand it you need to have had an employment contract with the company to claim redundancy.

 

[ChrisCallaghan]

You can dissolve the company if you are the only creditor. As I understand it you need to have had an employment contract with the company to claim redundancy.

The Redundancy Payments Service won't pay out a claim if the company has been dissolved.

 

[JJL]

Thanks for the responses. To clarify, if I go down the route of CVL and all other creditors are paid, can I be the only creditor with the £6000 I’ve loaned the business? I’m thinking of paying the cost of CVL to get redundancy, holiday and notice pay.

 

[ChrisCallaghan]

Yes you can be the only creditor. ?

 

[Chris Parkman]

To JJL

Chris is right in what he has said. The key issue will be what is the value of your employee claim compared to the cost of a liquidation. If the employee claim is less than the costs of liquidation, then you would be better to just dissolve the company.

 

[JJL]

Can anyone advise what would happen with stock and assets during CVL. Stock is around £800 but pretty much useless odd 1 or 2 of around dozens of products lines, very difficult to sell, I can’t even shift them on eBay. Also, a 7 year old computer and printer plus a couple of desks.

Thanks.

 

[Chris Parkman]

The Liquidator is likely to disclaim them

 

[Newchodge]

The Redundancy Payments Service won't pay out a claim if the company has been dissolved.

What if the employee wins an employment tribunal claim? Will the redundancy payments service meet the claim then?

 

[IanSuth]

Can anyone advise what would happen with stock and assets during CVL. Stock is around £800 but pretty much useless odd 1 or 2 of around dozens of products lines, very difficult to sell, I can’t even shift them on eBay. Also, a 7 year old computer and printer plus a couple of desks.

Thanks.

when we did a phoenix in 2009 we got the local auction house to value assets, they did a valuation, deducted removal (inc disposal costs of worthless items) and auction costs and gave us in writing the answer that basically the Net value was £1 (which the newco then purchased, kept the bits it wanted like a big shredder and paid for the proper disposal of the rest)

I think from memory unless very special any business PC over about 2 (maybe 3) years is considered worthless, not least as the data has to be cleared off properly

 

[Lisa Thomas]

What if the employee wins an employment tribunal claim? Will the redundancy payments service meet the claim then?

Yes but the claim will be limited to redundancy only. So there would be no payments for notice, holiday, wage or pension contribution arrears.

 

[JJL]

Thanks for the responses. Does anyone have an idea as to cost for dissolving the company? If I’m the only creditor do I keep stock and computers? What about future VAT returns?

 

[ChrisCallaghan]

Last time I checked I believe the cost is £8 for an online application and £10 for a paper application. See the below:

Strike off your limited company from the Companies Register

How to close down your limited company by getting it struck off the Companies Register

www.gov.uk

Once the company is dissolved there is no further requirement to fill VAT returns.

 

[Lisa Thomas]

HMRC will object to the DS01 filing if there are outstanding returns. The company will likely be left in limbo until eventually HMRC stop objecting, or Companies House strikes it off for non filing of statutory returns.