Closing a ltd company

[Mark Hines]

Ltd company needs to close we have no debts but do have a 4 year commercial lease (only 6 months into) ...

Reason for closure is loss of connercial contract and noe losing money every month...

Need to close to avoid havying to pay 3.5yrs left on lease...

We have a few assets but the last few months ive borrowed money from my brother to keep trading ! I need to transfer these assets (x3 lorries) to him to pay this debt as im worried our landlord may try to seize assets once they realise we are closing ...

I would add we are not in arears and have paid rent up to dec 18 already ..

Question - can I sign over the vehicles to my brotger ?

 

[Blaby Loyal]

There is nothing preventing you from transferring the vehicles as you have suggested: whether that transfer is legal or capable of being overturned is a different matter.

If the company goes into a formal insolvency then it will be a clear preference and possibly a transaction at an undervalue as well.

Why should your brother benefit at the expense of the landlord and all other creditors?

You may not be in arrears with the current rent but what about the unexpired portion?

 

[Mr D]

Ltd company needs to close we have no debts but do have a 4 year commercial lease (only 6 months into) ...

Reason for closure is loss of connercial contract and noe losing money every month...

Need to close to avoid havying to pay 3.5yrs left on lease...

We have a few assets but the last few months ive borrowed money from my brother to keep trading ! I need to transfer these assets (x3 lorries) to him to pay this debt as im worried our landlord may try to seize assets once they realise we are closing ...

I would add we are not in arears and have paid rent up to dec 18 already ..

Question - can I sign over the vehicles to my brotger ?

Sell the vehicles and pay for insolvency practitioner from the proceeds. You have two creditors, showing a preference to one can be a bad idea.

If you hand over the vehicles to your brother how are you protecting the interests of your other creditor?

And read your lease. Its very common to have the director sign a personal guarantee. And you (not the company) will end up paying for up to the next 3.5 years.

Commercial rents don't have the same protection personal renting does. Look at the contract, you would normally be held to the contract by the landlord.

 

[UK Contractor Accountant]

Your brother should have registered a charge over the lorries as part of the loan conditions.

 

[Rob Dunner]

As others have already pointed out and warned you regarding the consequences :
To show and demonstrate preference of one creditor instead of treating all fairly is not good. Have you actually accessed professional legal knowledge and advise?
What you seem to be planning in terms of how you approach your creditors may ultimately lead to a very big problem that you yourself have orchestrated and engineered.
Moreover you seem too keen to move forward into direction that suits you;
Furthermore be extremely careful of personal guarantor agreements? Are you clear on this one? If not you may be bitten quite badly:
First thing Monday - seek proper, qualified legal advise and not just vague chats about things.

 

[Lisa Thomas]

Hi

You need to take urgent advice form an Insolvency Practitioner due to the insolvency of the business as among other things you may be entering wrongful trading territory.

The proposal to give Company assets to your brother will be overturnable by any IP appointed and you could also be pursued personally for misfeasance etc.

You really need to take advice to ensure you are protecting yourself from any personal risks of claims being brought against you going forward and to ensure the Company's affairs are dealt with in a tidy fashion.

 

[Spongebob]

First of all, you need to establish that there is no personal guarantee in place to the landlord.

Transferring ownership of the trucks to your brother would be a mistake. There would be far too much of a clear paper trail.

A better idea would be to sell the trucks elsewhere for their market value and sit on the cash for a month or two. Use some of it to pay the landlord another quarter's rent, thus buying you valuable time.

If I was in your shoes I would pay my brother as much as possible of his debt and then vacate the premises before the end of March when the next rent payment is due.

Send the Spongebob letter to the landlord inviting him to wind the company up but pointing out that the company has no assets. The chances of him actually doing this are very slim. It costs money and it will appear to him that there is very little chance of him getting any back. He will in all probability simply curse you out and put the premises back on the market. The company will be wound up eventually without a liquidator ever pouring over the books.

Of course, there is always the risk that the landlord does wind the company up leading to a liquidator being appointed.

I give no advice as to what to do. It is your decision on whether you consider taking the slight chance of potential repercussions worthwhile.

I think it's worth a punt.

 

[Lisa Thomas]

Are HMRC owed any money? They are a creditor more likely to Liquidate a Company.

 

[mike galley]

Hi. Sorry to butt in on this post but I’m trying to find the Spongebob letter on this site. Any direction given would be greatly appreciated.

 

[Mr D]

Hi. Sorry to butt in on this post but I’m trying to find the Spongebob letter on this site. Any direction given would be greatly appreciated.

https://www.ukbusinessforums.co.uk/...ich-to-pay-an-insolvency-practitioner.316523/