Liquidate a company.

[Kraftdg]

Hi All,

I have owned a company i started since 2017 first couple of years were good , we make products for the leisure industry thus covid had a massive negative impact in 2020, i put all my savings in to the company and in 2023 i had to borrow 100k to get on top of bills, all with a personal guarantee and paid back over 12 months, sleepless nights and stress.... since then my biggest customer (75%) in 2022 stopped paying on top, he went from paying on 30 days to 150 days, we employed an invoice factoring company which saved us, although the cost crept up and we havent been back in profit since, breaking even or losing money every year since...... the last year has been the worst so far and im well behind on vat and paye, weve been here beffore and our could months march till spetember we normally catch up, however, with rent and material increases and turnover down i feel i cant take the stress anymore, we employ 13 people and all staff , rent , and most suppliers are paid up to date but i feel im now on the dreaed downward spiral, i have another small buisiness , seperate i run mail order supplies that i could probably make a living, generally though i earn about 4ok and four of my staff earn more so i dont take out more than i need, company probably probably only has assets and stock of 20 k or so, so i am looking for advice? is to 'chicken ' to give up ? I literally live day to day at the moment. We had an investor lined up so i continued to try and make it work for the last year but i feel hes waiitng for me to fail so he can jump in and take over if it goes into recieveship, well maybe hes done it 4 times before with other companies. Thanks for Listening

 

[Lee Green]

My recommendation would be to call an insolvency practitioner and have a proper discussion about the affairs and get all of the options laid out for you. This should be free and confidential.

Then you can make an informed decision about the best way forward.

Lee

 

[INFERNO]

My recommendation would be to call an insolvency practitioner and have a proper discussion about the affairs and get all of the options laid out for you. This should be free and confidential.

Then you can make an informed decision about the best way forward.

Lee

Many Thanks Lee, i had a five minute chat with the acccountant this morning he said the same, he did say he feels i could continue for months or maybe even turn it around but hes quite right i employ family maembers and feels im stressing and getting by and soldiering on more for them rather than for my own longer term benefit. I'll do a google search and speak to a pro, Thanks

 

[Lee Green]

For the avoidance of doubt I am an insolvency practitioner. Others on this site also are. We are willing and able to assist.

 

[INFERNO]

For the avoidance of doubt I am an insolvency practitioner. Others on this site also are. We are willing and able to assist.

ah ok, duh, i didnt look, i'm on my phone and eyes are failing, i'll drop you an email this evening. I had a quick google and the usual 'For just £975 we can do it all' lol, if i go ahead a cowboy is last thing i need.

 

[Lisa Thomas]

It's not 'chicken' to give up - you might also be in wrongful trading territory (and other 'misconduct' type scenarios), which can come back to bite you personally if you don't take steps to mitigate the position in your capacity as Director.

I'd be happy to give you a second opinion if you want to compare notes after speaking with Lee.

Here's a link to my video with more info on the potential options:

- YouTube

Enjoy the videos and music that you love, upload original content and share it all with friends, family and the world on YouTube.

youtu.be

 

[Shaun@M&H]

ah ok, duh, i didnt look, i'm on my phone and eyes are failing, i'll drop you an email this evening. I had a quick google and the usual 'For just £975 we can do it all' lol, if i go ahead a cowboy is last thing i need.

A good Insolvency Practitioner will explore the options available to you beyond informal possibilities, such as a CVA, Moratoriums, administration and liquidation. They will always try to avoid a formal appointment under the Insolvency Act.

It does look like you might be entering wrongful trading territory. If your business does not look like it will pick up and you have an investor waiting to finance then a sale to him might be the way to go.

You will most likely need to deal with the release of the personal guarantees as part of any sale. If you enter into a formal insolvency appointment then they will most likely be looking at you to make up any shortfall and call upon those guarantees.

You would need to speak with an Insolvency Practitioner who would discuss the options with you but if the stress is getting too much then it sounds like you want out anyway and want to do that in a way that minimises everyone's loss.

Appreciate that it is a week later but I would happily go through the options with you if you would like to call the office.

 

[Lisa Thomas]

Hi Shaun

Please can you explain by what you mean with: "A good IP...will always try to avoid a formal appointment under the Insolvency Act."?

Thanks

 

[Shaun@M&H]

Hi Shaun

Please can you explain by what you mean with: "A good IP...will always try to avoid a formal appointment under the Insolvency Act."?

Thanks

Certainly.

As in turnaround the business, or find an informal way to avoid an insolvency if the business is distressed. Not every phone call to an IP has to result in an appointment under the Insolvency Act.

To quote the ICAEW "IPs will always explore how a business can be saved."

 

[Lisa Thomas]

Certainly.

As in turnaround the business, or find an informal way to avoid an insolvency if the business is distressed. Not every phone call to an IP has to result in an appointment under the Insolvency Act.

To quote the ICAEW "IPs will always explore how a business can be saved."

Thanks for clarifying. I agree, although a lot of Directors will take advice too late for there to be any chance of potential rescue (or the business is not viable for rescue/turnaround).

 

[Spongebob]

It certainly isn't "chicken".

The biggest regret most directors of companies closing down have is that they didn't do it years earlier!