Ceased trading owing rates and utilities

[mister_ric]

Hello I am after some advice please.
My Limited Company has ceased trading after 8 years as we were becoming insolvent. We do not owe HMRC anything. We have no assets or cash to pay for our final accounts to be submitted or for an IP. We owe about £3000 in water, gas and electricity and £4000 in business rates. I want to avoid anyone bringing in the OR as we left the premises in a bit of a hurry and all the paperwork was left behind so it could look dodgy although we did nothing illegal. Myself and the other director are personal guarentees for a 15k bank loan which we accept we will have to pay.
My questions are;
What should my next move be?
Write to creditors explaining our situation?
If i do this will these creditors go away or apply to wind up the company?
Wait 3 months and apply to have the company struck off?
Or wait a year until companies house tries to strike the company off?
Should we resign as directors (there are 2)?

Any advice would be much appreciated.

 

[mhall]

Write to the people you owe money to and inform them that the company has ceased trading. You have no personal liability unless you signed Directors guarantees. They may try and wind the company up but I doubt it as it will cost them more money to do so.

Expect the Utilities companies to chase you but just reply with the same letter, disclaiming any personal liability. The Utilities Company will then sell your debt on to a collections company and the process will repeat ad infinitum until the utilities company have run out of collectors to sell the debt to.

 

[Alan R Price]

Expect the Utilities companies to chase you but just reply with the same letter, disclaiming any personal liability. The Utilities Company will then sell your debt on to a collections company and the process will repeat ad infinitum until the utilities company have run out of collectors to sell the debt to.

Excellent analysis!

 

[mister_ric]

thank you for your reply that was very helpful I think I will go down this route. Have you any idea how the council will react with regards to the unpaid business rates? Are they known for opting to apply for a winding up order as I want to avoid this if I can? or can they go after the landlord? or the directors?

 

[kulture]

Why do you want to avoid a winding up order? It would end all your problems.

 

[mister_ric]

i just dont want the stress of an official receiver interviewing me and going through all our accounts especially as i no longer have the paperwork as it was left behind and the new tennants have gutted the place so i fear they may try and prosecute me or something for not keeping records? is this possible?

 

[kulture]

Do not worry about that. You will not be the first, nor the last, person who has thrown in the keys and walked out of a property forgetting the paperwork. I am sure the OR has heard it all before. Further they are not going to bother suing you for a few thousand pounds. If we were talking hundreds of thousands then perhaps.

 

[Alan R Price]

i just dont want the stress of an official receiver interviewing me and going through all our accounts especially as i no longer have the paperwork as it was left behind and the new tennants have gutted the place so i fear they may try and prosecute me or something for not keeping records? is this possible?

The debts appear to be about £22,000, of which you have personally guaranteed £15,000 to the bank. The official receiver has little enough time and resources to pursue the real bad guys, so he isn't going to give you a second glance. In any event, the OR deals with most of these things by correspondence nowadays, so it is extremely unlikely you would have to attend for interview; and even if you did, it wouldn't be a terribly onerous exercise - they have bigger fish to fry!

 

[Spongebob]

Hello I am after some advice please.
My Limited Company has ceased trading after 8 years as we were becoming insolvent. We do not owe HMRC anything. We have no assets or cash to pay for our final accounts to be submitted or for an IP. We owe about £3000 in water, gas and electricity and £4000 in business rates. I want to avoid anyone bringing in the OR as we left the premises in a bit of a hurry and all the paperwork was left behind so it could look dodgy although we did nothing illegal. Myself and the other director are personal guarentees for a 15k bank loan which we accept we will have to pay.
My questions are;
What should my next move be?
Write to creditors explaining our situation?
If i do this will these creditors go away or apply to wind up the company?
Wait 3 months and apply to have the company struck off?
Or wait a year until companies house tries to strike the company off?
Should we resign as directors (there are 2)?

Any advice would be much appreciated.

Good advice above; you have nothing to worry about whatsoever.

Your first step should be to write to all creditors as follows;

Most will go away, never to be heard from again. Winding up proceedings are expensive, and the only creditor likely to initiate them is HMRC, who do so as a matter of course. As they are not a creditor in your situation, no-one is likely to wind the company up as it would be viewed as throwing good money after bad.

If you apply to Companies House for striking off after 3 months I would be very surprised if anyone objected. Job done.


As mentioned above, utility companies sometimes home in on a named director and attempt to chase them personally for the 'debt'. Simply stand your ground if this happens and restate that the debt is the company's and that you have no liability.

Challenge them to prove that a contract between the utility company and yourself ever existed. They will be unable to do so but some time later another debt collector may well try again.

I still periodically receive demands from some debt collector or other over a debt to Eon owed by a company of mine which was liquidated 6 years ago. I now actively look forward to having a little fun with some new meat...

 

[Alan R Price]

I still periodically receive demands from some debt collector or other over a debt to Eon owed by a company of mine which was liquidated 6 years ago. I now actively look forward to having a little fun with some new meat...

You are a scamp.

 

[mister_ric]

Hi there and thanks for all your helpful advice! I have sent out letters and all has gone quiet for the last couple of months which is nice. However Unicom have sent me a telephone bill addressed to me personally at my home address for the last months line rental of £18 and then some kind of termination fee of £750!!! Plus they are adding interest so i just need some advice please as to what to do?
Can they do this?

All previous bills while trading had my name, then the trading name and the trading address, they have just replaced the trading address with my home address and I dont have the original agreement as it was set up years ago?

 

[mhall]

They have got your address no doubt from Companies House and are simply trying to scare you. Assuming that you signed no Directors guarantees, simply write back informing them that the address is nothing to do with the company, that you have no assets of the business at the address and any further communication to your home address will be seen as harrasment. It is up to them to prove you are liable as an individual.

Bear in mind that you will get dozens of these letters in the next couple of years as your debt is sold on and on and on and on and on to many debt collectors.

 

[Spongebob]

Hi there and thanks for all your helpful advice! I have sent out letters and all has gone quiet for the last couple of months which is nice. However Unicom have sent me a telephone bill addressed to me personally at my home address for the last months line rental of £18 and then some kind of termination fee of £750!!! Plus they are adding interest so i just need some advice please as to what to do?
Can they do this?

All previous bills while trading had my name, then the trading name and the trading address, they have just replaced the trading address with my home address and I dont have the original agreement as it was set up years ago?

I presume that the telephone account was taken out in the name of the company.

Utility companies use this tactic as a matter of course; seemingly it must work in a significant proportion of cases or they wouldn't continue with it.

Simply write back as follows;

Dear Sirs,

I am in receipt your letter dated XX/9/12 regarding an alleged debt from myself to your company. This is something of a mystery because at no point in time has there ever been any contract between your company and myself for the supply of telephone services or anything else. On these grounds this debt is in dispute.
If I am mistaken in this and there has been such a contract please furnish me with full details by return and a copy of my signed agreement.

You are clearly confusing me with XXXX Ltd, a company of which I was a director. As you well know, I as a director have no liability whatsoever for the debts of this company.

Please address all further correspondence to XXXX Ltd. They are your debtor and they alone have liability for any debt.

XXXX Ltd ceased trading in June this year and has no assets. If you are determined to persue your debt with them I suggest that you initiate winding-up proceedings through the High Court without delay so that the company can be liquidated by the Official Receiver.

I do not expect personally to hear from you again.

As MHall says, you will continue to receive letters from various debt collection agencies over the years as the 'debt' is sold and resold time and again. In my case this has been going on for 6 years regarding a 'debt' to Eon. I now look forward to receiving such letters and having a whole bunch of fun composing ever more withering and abusive responses.

 

[Alan R Price]

All previous bills while trading had my name, then the trading name and the trading address, they have just replaced the trading address with my home address and I dont have the original agreement as it was set up years ago?

Was the word "limited" ever included in the correspondence from Unicom or anything you sent to them? If not, you may have a problem because they could claim they were not aware they were dealing with a company and that they thought they were dealing with you personally. It may not however be quite as straightforward as that, for example if they were aware they were drawing direct debits from a limited company bank account it might be imputed that they knew they were not dealing with you personally.

Spongebob's letter looks like a good place to start.