- Original Poster
- #1
I have a Ltd Company that I am thinking of ceasing trading. Don't want to involve insolvency practitioners due to expense.
Ltd company been going a couple of years, self and wife directors, goodwill brought into company when started from previous sole trader/partnership of same name (same principals), but much remains unpaid (in directors' loan accounts so I assume we could argue that any rights with respect to goodwill are still ours and not the Ltd company's?).
Turnover has fallen, but business still viable if I could get rid of staff (main overhead outside of rent, rates and energy), but this will cost me thousands in redundancy due to their length of service, which I don't want to put in.
Cash flow wise, it's hand to mouth (and has been for 2 years), but we're managing apart from VAT and right now the company could probably clear all creditors and staff wages this month (but not one month's VAT). PAYE up to date.
I have had payment terms in past (1 year ago)from HMRC for both VAT and PAYE and they're not a pleasant bunch. Not sure they'd be so understanding anoher time round.
We have very few assets of any worth (old furniture, old computers, nothing else - not sure of value in books). No liabilities, overdrafts, loans (other than directors')
Can anyone see any holes/dangers in the following plan?
Cease trading as a Ltd company as soon as possible, but start trading under same name at same address as a sole trader/partnership - i.e. cease ABC Ltd and start ABC. This would save complications and expense - reputation, company name awareness, website and literature, etc. Naturally, I would remove any references to being a limited company.
Stay in my current rented premises (no problems with landlord).
Possibly re-employ one or two members of the old staff - new contracts or make self-employed?
New bank account - would you advise I use the same bank as the Ltd company (also my private banker) or a different bank?
Tell clients we are now a sole trader/partnership and continue business as usual. If asked, say it's for tax reasons.
I don't anticipate any bailiffs calling to collect debts because I hope there won't be any. However, if there were, could I prevent bailiffs trying to recover assets (very few and little value) by 'selling' them before ceasing trading to me or a friendly third party?
All being well (hope I am not being too naïve), things would be able to continue without too much disruption and I would have (hopefully) retained good relations with suppliers and customers. Staff and HMRC are another matter, but I have to face this.
Ltd company been going a couple of years, self and wife directors, goodwill brought into company when started from previous sole trader/partnership of same name (same principals), but much remains unpaid (in directors' loan accounts so I assume we could argue that any rights with respect to goodwill are still ours and not the Ltd company's?).
Turnover has fallen, but business still viable if I could get rid of staff (main overhead outside of rent, rates and energy), but this will cost me thousands in redundancy due to their length of service, which I don't want to put in.
Cash flow wise, it's hand to mouth (and has been for 2 years), but we're managing apart from VAT and right now the company could probably clear all creditors and staff wages this month (but not one month's VAT). PAYE up to date.
I have had payment terms in past (1 year ago)from HMRC for both VAT and PAYE and they're not a pleasant bunch. Not sure they'd be so understanding anoher time round.
We have very few assets of any worth (old furniture, old computers, nothing else - not sure of value in books). No liabilities, overdrafts, loans (other than directors')
Can anyone see any holes/dangers in the following plan?
Cease trading as a Ltd company as soon as possible, but start trading under same name at same address as a sole trader/partnership - i.e. cease ABC Ltd and start ABC. This would save complications and expense - reputation, company name awareness, website and literature, etc. Naturally, I would remove any references to being a limited company.
Stay in my current rented premises (no problems with landlord).
Possibly re-employ one or two members of the old staff - new contracts or make self-employed?
New bank account - would you advise I use the same bank as the Ltd company (also my private banker) or a different bank?
Tell clients we are now a sole trader/partnership and continue business as usual. If asked, say it's for tax reasons.
I don't anticipate any bailiffs calling to collect debts because I hope there won't be any. However, if there were, could I prevent bailiffs trying to recover assets (very few and little value) by 'selling' them before ceasing trading to me or a friendly third party?
All being well (hope I am not being too naïve), things would be able to continue without too much disruption and I would have (hopefully) retained good relations with suppliers and customers. Staff and HMRC are another matter, but I have to face this.
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