Debts on Ltd company

[Ant67]

Hi
So in 2016 myself, son in law and daughter decided to go into the Hospitality trade running a pub, We set up a Ltd company with myself, son in law as directors and my daughter as the secretary. We ran the pub then Covid hit we took out a BBL, in the end it ate all the money the business had and my private money. So we decided to give the pub up, my son in law resigned as a director which just left myself and daughter as the only active people on the Ltd company. We gave the pub back to the landlords and moved out in Dec 2022. We had debts to the bank for the BBL plus to the VAT man and also other debts ie energy, tills etc. In total i believe a debt of about 40K is against the company. I dont have any money nor the business to liquidate etc the Ltd company.
I am disabled and live in a bungalow which is rented from the council and i have no assets at all
What are my options? Wait until i get taken to court for the BBL or the VAT man and get the company closed down by companies house.

 

[Scalloway]

Wait until i get taken to court for the BBL or the VAT man and get the company closed down by companies house.

That is it. Did you take money out of the company after it got into trouble?

 

[Ant67]

That is it. Did you take money out of the company after it got into trouble?

No never took any money out of the company, just kept putting money in then i thought thats enough

 

[Scalloway]

The experts will be along at later but it seems to me that you just need to wait to see who acts first, the bank or Companies House.

 

[Ant67]

The experts will be along at later but it seems to me that you just need to wait to see who acts first, the bank or Companies House.

What about the energy companies i have had an email saying they are taking me to court

 

[WaveJumper]

Hopefully all your contracts are in the ltd company name and your not carrying any PG's. As above more sound advice I am sure will be along pretty soon in the mean time welcome to the UKBF. This can be a stressful time but for now just sit tight.

 

[japancool]

What's the rough breakdown of your debt?

 

[Ant67]

What's the rough breakdown of your debt?

22k BBL, 15k VAT man, 2k energy costs, 1k card machine, and about 1k misc costs

 

[Elliot Green]

If the company has no assets to pay for a voluntary Liquidation and the Directors cannot help the company with the same then in all likelihood HMRC will eventually wind up the company via what is known as Compulsory Liquidation. It is quite conceivable you will have to meet a government Liquidator called the Official Receiver to answer questions and account for the company's demise.

 

[ChrisCallaghan]

Hi @Ant67 ,

Sorry to hear about the situation you find yourself in. @Elliot Green has summed up your options pretty precisely. It would certainly be much quicker to instruct an insolvency practice to close the company by Voluntary Liquidation, but as you are aware this can be quite pricey. If you would like a quotation, please message me.

For further help with what @Elliot Green has described, please see the below guide on this forum:

CLOSING A LIMITED COMPANY WTH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER

CLOSING AN INSOLVENT LIMITED COMPANY WITH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER If a company is unable to carry on trading due to becoming insolvent the standard procedure for closing it down is for the directors to appoint an Insolvency Practitioner to liquidate it...

www.ukbusinessforums.co.uk

Please note when reading this guide that it was written pre-Corona, and does not take BBLs into consideration. Currently BBL lenders and the Department of Business and Trade are objecting to strike action (regardless of whether it is a voluntary application or instigated by Companies House) and it is unclear if/when objections will cease.

Your best bet, as @Elliot Green has described, is that HMRC come forward to wind up your company (aka a compulsory liquidation).

 

[Lisa Thomas]

Options are:

1. Do nothing and eventually Companies House will strike it off for non filing, or a creditor will liquidate the company (HMRC most likely suspects)
2. Liquidate in court for c£3k.
3. Liquidate via a Creditors Voluntary Liquidation for £5k plus VAT and upwards. Some IP's will let you pay thee costs in instalments.

Option 1 seems to be the best option based on the info provided.