The company should use an IP if it has funds to do so. The 'sponge bob' method is only relevant if the company is penniless and can't afford an IP. Just because you don't appoint an IP, doesn't mean a creditor won't. At least if you appoint an IP you will be able to choose them. If a creditor appoints an IP (which is a possibility due to the level of debts) then they choose. Ask your accountant for an up to date DLA balance, repay the company that amount and then appoint an IP with the cash in the bank - this would be the 'proper' way to do things.