Closing a limited company in debt with no funds or assets

[Dobbollah]

It was May 2021, so 2 years now.

Could it roll on for years, and years ?

Or is there a point where it cuts off and gets closed?

 

[ChrisCallaghan]

In all honesty @Dobbollah we are all in new territory here. Prior to Covid and BBLs, I was of the understanding that creditors could not object indefinitely unless they could evidence they were taking some form of legal action against the company. Typically this would be the creditor coming forward to wind up the company, aka Compulsory Liquidation.

It would appear that BBL lenders can object indefinitely. I suspect they will eventual let it go, but none of us know when. I know of a few cases that went through in 18 - 24 months, but off the top of my head, I can't remember which banks these were.

You cannot do any more than you've done. Without paying for a liquidator, it is just a case of sticking with it.

Are you getting much contact from your company's BBL provider?

 

[Newchodge]

In all honesty @Dobbollah we are all in new territory here. Prior to Covid and BBLs, I was of the understanding that creditors could not object indefinitely unless they could evidence they were taking some form of legal action against the company. Typically this would be the creditor coming forward to wind up the company, aka Compulsory Liquidation.

It would appear that BBL lenders can object indefinitely. I suspect they will eventual let it go, but none of us know when. I know of a few cases that went through in 18 - 24 months, but off the top of my head, I can't remember which banks these were.

You cannot do any more than you've done. Without paying for a liquidator, it is just a case of sticking with it.

Are you getting much contact from your company's BBL provider?

Is there an argument to say: ignore it and get on with your life?

 

[ChrisCallaghan]

Is there an argument to say: ignore it and get on with your life?

Completely agree. Thankfully the worse a BBL lender (or any collection agents they instruct) can do is send letters and make phone calls. No door stop collection activities (i.e. bailiffs and similar) are permitted.

 

[Dobbollah]

Chris, no no real contact from them so it's not stressful, but as people like yourself have been so very helpful I update things so it may 1 day be helpful to others.

Cyndy yes there is, but I guess if people like me don't ask questions or follow posts through to their conclusion then others can't read/learn from my experience.

 

[Dobbollah]

3 months further on....still no change, 51 months and counting.

But still no hassle or chasing either.

See you all in 3 months for another update ?

 

[ChrisCallaghan]

3 months further on....still no change, 51 months and counting.

But still no hassle or chasing either.

See you all in 3 months for another update ?

As always, thank you for the update. Still no hassle or contact from the BBL lender?

 

[Dobbollah]

No nothing at all.....I wonder how long it will be drawn out....

 

[Spongebob]

No nothing at all.....I wonder how long it will be drawn out....

It’s a long time since I popped by these forums, and nothing much has changed!

This could drag on for years yet.

I too took out a small BBL at the beginning of the pandemic - £12k was the maximum available due to the tiny turnover of my little company at the time. In retrospect I should have applied for the full £50k! ?

I decided to retire and ditch the company a year later. The BBL money had been spent on overheads and paying live creditors during a time when the company had no other income.

I didn’t submit a DS01 - instead I simply didn’t submit the annual Confirmation Statement. This triggered Companies House automatically initiating the Strike off process.

I then sent the SpongeBob letter to the bank.

From then on my experience has been much the same as everyone else’s.

Strike off suspended due to objection (presumably from the bank)

Around six months later I started getting text messages purporting to be from the bank demanding that I contact them regarding my account. I ignored them.

After a year or so I started getting text messages from a debt collection agency working for the bank. I ignored these for a long time before finally emailing them with a copy of the SpongeBob letter that I had sent to the bank.

Since then - nothing.

The company’s registered office is at my accountant’s and he hasn’t received any correspondence either.

I don’t really expect to hear anything more about it. One day I guess I’ll check on the Companies Houses website and discover that the company has been dissolved. It might take months or it might take years. Ultimately it doesn’t really matter.

My advice to anyone in a similar situation is simply to put it behind you and forget about it. Get in with your life!

I’m now longer in any kind of business. At the age of 63 I have taken a proper job for the first time in my life - as a greenkeeper on a golf course!

My meagre wages are eked out by my playing in a blues band at the weekend.

Life has never been better!

I’m delighted that the SpongeBob Plan continues to help people in times of financial peril. It was originally devised as a rant against evil Insolvency Practitioners. I couldn’t resist a smile when I saw it described on this thread as “The Gold Standard” by an Insolvency Practitioner! ?

I’ll pop in again in a year or so to see how you’re all doing!

 

[JEREMY HAWKE]

It’s a long time since I popped by these forums, and nothing much has changed!

This could drag on for years yet.

I too took out a small BBL at the beginning of the pandemic - £12k was the maximum available due to the tiny turnover of my little company at the time. In retrospect I should have applied for the full £50k! ?

I decided to retire and ditch the company a year later. The BBL money had been spent on overheads and paying live creditors during a time when the company had no other income.

I didn’t submit a DS01 - instead I simply didn’t submit the annual Confirmation Statement. This triggered Companies House automatically initiating the Strike off process.

I then sent the SpongeBob letter to the bank.

From then on my experience has been much the same as everyone else’s.

Strike off suspended due to objection (presumably from the bank)

Around six months later I started getting text messages purporting to be from the bank demanding that I contact them regarding my account. I ignored them.

After a year or so I started getting text messages from a debt collection agency working for the bank. I ignored these for a long time before finally emailing them with a copy of the SpongeBob letter that I had sent to the bank.

Since then - nothing.

The company’s registered office is at my accountant’s and he hasn’t received any correspondence either.

I don’t really expect to hear anything more about it. One day I guess I’ll check on the Companies Houses website and discover that the company has been dissolved. It might take months or it might take years. Ultimately it doesn’t really matter.

My advice to anyone in a similar situation is simply to put it behind you and forget about it. Get in with your life!

I’m now longer in any kind of business. At the age of 63 I have taken a proper job for the first time in my life - as a greenkeeper on a golf course!

My meagre wages are eked out by my playing in a blues band at the weekend.

Life has never been better!

I’m delighted that the SpongeBob Plan continues to help people in times of financial peril. It was originally devised as a rant against evil Insolvency Practitioners. I couldn’t resist a smile when I saw it described on this thread as “The Gold Standard” by an Insolvency Practitioner! ?

I’ll pop in again in a year or so to see how you’re all doing!

Many people are less resilient than you and that hassle from the bank could send them over the edge
Me! I dont give a f££K either

Your experience and business skills are demonstrating to people on here that deliberately set out to scupper your company using the plan that you developed for people much worse off than yourself

At 63 you are sailing far too close to the wind and something could throw itself up that could kick you in the balls big time and at your time of life you are probably too old to start from the beginning again.

As far as insulting the IPs you might want to stop and think for a while .The IPs on this forum do exactly the same as us .They give their time free on here to help people and while they may have high charges you cant expect them to dissolve companies for minimum wage!

Your plan is very good for those that have nothing but lets all remind ourselves that when we start a businesses we take on the responsibilities on that come with it.
If you don't want the responsibilities then just find an easier life

 

[Zono]

I still have no updates or news since March 23. I used the Spongbob method as advised here and there have been no updates, and the company still showing as active proposal to strike off since Dec 22. My company registered address is coming up for renewal as I I kept it for correspondence. Do I need to keep this active for any possible future correspondence or cancel it?

 

[ChrisCallaghan]

I'm sure that technically you should renew it. I can't locate the exact wording but I'm sure somewhere in The Companies Act it states that the company's registered should be somewhere that a certificate of incorporation should be available on request....

But practically speaking you'd probably be fine to not renew it. If it isn't all that expensive, personally I'd recommend keeping it up to ensure you don't miss any crucial correspondence, especially as we don't yet know how things are going to play out for companies, like yours, stuck in this suspended dissolution state due to outstanding BBLs.

 

[Dobbollah]

Just thought I'd pop an update as we approach the 3 year mark, surprise surprise no change.

No hassle from anyone, but still blocked from closure.

 

[ChrisCallaghan]

Just thought I'd pop an update as we approach the 3 year mark, surprise surprise no change.

No hassle from anyone, but still blocked from closure.

As always, thank you for the update.

 

[ville1401]

Could it be that as long as the banks carry these bbl's on their books as outstanding they can claim them as assets in their balance sheets and thus not fall foul of capitilisation rules? Or some other dodgy purpose ?Or am I just a cynical old sod?

 

[Frank Wessely]

Many people are less resilient than you and that hassle from the bank could send them over the edge
Me! I dont give a f££K either

Your experience and business skills are demonstrating to people on here that deliberately set out to scupper your company using the plan that you developed for people much worse off than yourself

At 63 you are sailing far too close to the wind and something could throw itself up that could kick you in the balls big time and at your time of life you are probably too old to start from the beginning again.

As far as insulting the IPs you might want to stop and think for a while .The IPs on this forum do exactly the same as us .They give their time free on here to help people and while they may have high charges you cant expect them to dissolve companies for minimum wage!

Your plan is very good for those that have nothing but lets all remind ourselves that when we start a businesses we take on the responsibilities on that come with it.
If you don't want the responsibilities then just find an easier life

Well said.

 

[AlyCat]

Hello All,

Pardon my jumping on this thread but cam a across while searching on ways to close our company down and this seems to fit the bill.

We are a small eCommerce Limited Company that is now about to default on our BBL as it can't pay it anymore. We have stopped buying stock cos we can't afford to and so we now need to close it. We have no assets other than a little bit of stock we trying to sell.

It has absolutely no money for Liquidation and so from my research, the only option is this Dissolution option. In order to do this, we would need to cease trading for at least 3 months before we submit the form. Of course, The BBL provider will object and we will then be at their mercy but hopefully they will then just decide to strike off.

Just so I' m clear, is this the so called SpongeBob method that has been mentioned?

 

[ChrisCallaghan]

Hello All,

Pardon my jumping on this thread but cam a across while searching on ways to close our company down and this seems to fit the bill.

We are a small eCommerce Limited Company that is now about to default on our BBL as it can't pay it anymore. We have stopped buying stock cos we can't afford to and so we now need to close it. We have no assets other than a little bit of stock we trying to sell.

It has absolutely no money for Liquidation and so from my research, the only option is this Dissolution option. In order to do this, we would need to cease trading for at least 3 months before we submit the form. Of course, The BBL provider will object and we will then be at their mercy but hopefully they will then just decide to strike off.

Just so I' m clear, is this the so called SpongeBob method that has been mentioned?

Pretty much, though the SpongeBob method was written pre-Covid, however you seem up-to-date with with BBL lenders objecting to strike off. If you'd like a modern template letter to help you, see https://www.businessdebtline.org/sample-letters/considering-strike/

 

[AlyCat]

Thanks for that.

So I guess our first step would be to decide not to trade anymore. Which would been closing down our selling platforms.

What if we just wait for the BBL to default? What will the bank do then when we tell them it cannot be paid anymore? Would they then force us to start the dissolution process?

 

[Mark T Jones]

Could it be that as long as the banks carry these bbl's on their books as outstanding they can claim them as assets in their balance sheets and thus not fall foul of capitilisation rules? Or some other dodgy purpose ?Or am I just a cynical old sod?

Far more likely that the Government have stipulated that banks must prove that they have made every possible attempt to recover the debt, and this is part of the proof

 

[Dobbollah]

As we approach the 4 year anniversary of the objection of the DSO1 closure request (no update on this front)

Surely at some point something has to happen ?

 

[Elliot Green]

As we approach the 4 year anniversary of the objection of the DSO1 closure request (no update on this front)

Surely at some point something has to happen ?

Why must something happen?

 

[ChrisCallaghan]

As we approach the 4 year anniversary of the objection of the DSO1 closure request (no update on this front)

Hi @Dobbollah ,

Thank you for keeping up us up-to-date. No changes to things as previously advised. For now, as before, the standard policy is to not let companies with outstanding BBLs to be dissolved. The lender objects, and/if they cease objecting, the Department of Business and Trade object, leaving the company in a limbo state.

Lenders do appear to now to be pro-actively forcing some companies with BBLs into liquidation through the courts, but these appear to be cases where they expect BBL misuse, fraud etc.

Surely at some point something has to happen ?

For now I suspect it's a combo of politics and practicality. Were the government's policy to change on this issue, the Insolvency Service simply does not have the manpower to deal with the investigations required for the number of companies that would be closed if dissolution applications like yours were allowed to go through. Politically, it would be an admission that potentially billions is being written off.

No one can say if or when this policy will change.

 

[ChrisCallaghan]

@Dobbollah - do you still get much contact from your company's BBL lender and/or or their agents?

 

[Merl89]

Sorry for jumping on this thread, but I'm in a similar situation (strike-off suspended for the past 18 months).
However, I'm concerned that I'm still receiving late filing notices from HMRC for two missed periods (though there is no tax owing). The penalties so far amount to £300.
Can I ignore these until the strike-off eventually goes through?

 

[ChrisCallaghan]

Can I ignore these until the strike-off eventually goes through?

Pretty much!

 

[Elliot Green]

Sorry for jumping on this thread, but I'm in a similar situation (strike-off suspended for the past 18 months).
However, I'm concerned that I'm still receiving late filing notices from HMRC for two missed periods (though there is no tax owing). The penalties so far amount to £300.
Can I ignore these until the strike-off eventually goes through?

Why would it be thought that the obligation to file does not remain?

 

[UK Contractor Accountant]

Why would it be thought that the obligation to file does not remain?

Does remain until Strike Off is achieved?

"Companies Act 2006 sets out the requirements for preparing, auditing and filing financial statements with the Registrar and the distribution of those financial statements to members of the company. These requirements are not changed by a company commencing strike off procedures.

If the formal strike off is finalised before the accounts filing deadline for a set of financial statements, whilst the legal requirement for financial statements to be prepared and filed remains, our expectation is that Companies House would not chase for the financial statements if not filed before strike-off, because there is no longer a company to file these financial statements against."

 

[Elliot Green]

Does remain until Strike Off is achieved?

"Companies Act 2006 sets out the requirements for preparing, auditing and filing financial statements with the Registrar and the distribution of those financial statements to members of the company. These requirements are not changed by a company commencing strike off procedures.

If the formal strike off is finalised before the accounts filing deadline for a set of financial statements, whilst the legal requirement for financial statements to be prepared and filed remains, our expectation is that Companies House would not chase for the financial statements if not filed before strike-off, because there is no longer a company to file these financial statements against."

As I understand it they were asking can they ignore HMRC filings where penalties have arisen.