Can't afford Liquidation

[Down not out]

Hi,

I invested in a restaurant franchise which is basically dead within a year. There are no assets to speak of as all the equipment etc was purchased using asset finance so I hold no title over it.

I wanted to close the business down properly but I just can't afford the liquidation fees.

I am thinking of writing to all the creditors explaining that the business has ceased trading and has no means of paying it's debt (circa £200k). I want to invite them to make a winding up petition but if no one wants to take that action, apply to companies house to make a striking off petition.

Can I do this even though there are active creditors? Two creditors have placed CCJ's, one has been granted and another is just an application but no doubt will be granted.

Any advice is much appreciated.

 

[Paul_Rosser]

Have a look at the Spongebob plan as that seems to mirror what you want to do

The Spongebob Plan

 

[Down not out]

Thank you for the link, very useful. Sounds like thisis the plan for me. I don't have any assets and no overdrawn DLA's.

I have no objections to any creditor filing a winding up order as I have nothing to hide.

If one of them does object to the striking off application do they have to follow up with a winding up order or can they keep objecting and then do nothing?

 

[AndrewEardley]

They have to follow up the objection with something.

CH wont like serial objectors, and eventually (I think someone said after 2/3 times) they will allow the strike off to go through

 

[Spongebob]

The Songebob Plan is intended for just such circumstances.

People do get a bit hung up on the striking off process, however. If no creditor initiates winding up proceedings the company will just sit there in name only until Companies House strike it off automatically after a couple of years for non-submission of returns.

Applying for a strike off before then is an optional extra, and if there is an overdrawn DLA a very good idea, but I have never been convinced of the imperitive of doing so in a situation such as yours.

Simply cease trading, send out the letters, walk away and move on. If HMRC are a creditor then they will probably wind the company up anyway.

 

[Down not out]

Thanks Bob, your plan will make a huge difference to my situation. I'm not bothered whether it goes through a formal liquidation process or not. I have nothing to hide or anything to be fearful of.

But for £10 and a few letters, it should force someone's hand.

Many Thanks.

 

[akbiz]

Hi, I am a similar situation. My Ltd company ceased training couple of years ago. I got a call from HMRC that company still owes them £1400 or so in corp tax. However, there is no money/assets in the company to pay them. The company is still active although not trading. What is the best course of action?


Thanks

 

[Down not out]

Hi, I think the advice would be the same as it was for me.

Get your DS01 form sent out!

I've done mine today to all creditors along with a letter inviting them to wind the company up, we'll see what happens next.

 

[Spongebob]

Hi, I am a similar situation. My Ltd company ceased training couple of years ago. I got a call from HMRC that company still owes them £1400 or so in corp tax. However, there is no money/assets in the company to pay them. The company is still active although not trading. What is the best course of action?


Thanks

There's no need to do anything!

 

[akbiz]

There's no need to do anything!

Not even DS01? Also, what about VAT deregistration?

 

[Spongebob]

Not even DS01? Also, what about VAT deregistration?

You can submit a DS01 if you like; otherwise just do nothing. Either CH will eventually strike the company off for non submission of returns or HMRC will wind the company up.

The only circumstances where submitting a DS01 is a very good idea is if your Directors Loan Account is overdrawn. There is then the chance that the debt will die with the company. A forum member 'got away' with £ 40k in this way.

There is no reason to deregister for VAT.

 

[akbiz]

Can they resign while HMRC wind up?

 

[Spongebob]

Can they resign while HMRC wind up?

Once the company is wound up the Official Receiver is appointed as liquidator. At this point the directors automatically cease to be directors. There is no need to resign.

As I said at the outset, there is no need to do anything at all; you can comfortably sit back and allow events to take their course.