How will personal bankruptcy affect my companies?

[bright_future]

I am reconciled to being made bankrupt within the next year due to debts (~£250k) from bad investments in property (having invested near the top of the market before the crash in 07/08).

I also run two business, as limited companies. Both provide different services. I will probably let one get liquidated as it's not performing well. The other one has a healthy positive balance.

I'm aware that once I get made bankrupt, I will be barred from being a director of a company. What exactly will happen regarding my companies (especially the healthier one that I want to keep running as long as possible). On the day I'm made bankrupt, will I be asked to declare any current directorships? What about past directorships? Or is there some time lag, and Companies House eventually gets my name and does a search.

Will bank accounts in the companies' names get frozen? When will this happen if so, and what will trigger it. Do I need to resign as director from the healthy company and appoint a new director *before* the bankruptcy? What about shareholding, does that need to be transferred too?

Are there any weblinks or other resources covering all this, even other questions on here?

many thanks!

 

[Lisa Thomas]

Hi

Sorry to hear about your impending BKY.

I presume you have taken advice and eliminated other options like an IVA to avoid and keep your Directorship/s going?

You are right - you can't be a Director whilst your are Bankrupt without Court permission. Your BKY usually lasts for one year (unless your discharge is suspended for wrongdoing or noncooperation).

You cannot be involved in the promotion, formation or management of a Ltd Company either.

If you haven't resigned before BKY you will be made to do so once BKY takes place so you may be a few weeks leeway before the Official Receiver jumps on this post appointment.

You options are to appoint a replacement Director and then simply become an employee of the Company taking steps to avoid any behavior that could warrant your involvement in managing the Co etc.

As regards shares they are potentially an asset of yours (if any value held). On assumption they have nominal value the OR probably won't be too interested in these but you may have to prove how much you sold them for, how you arrived at the sales figure and what happened to the money.

Best to leave the shares in your name, if nominal the O.R/Any Trustee appointed will likely allow you to keep them.

No the Company accounts will not get frozen because you go BKPT - the Companies are separate legal entities.

I suspect there are other similar questions on here of a similar theme as I have a vague recollection of answering such queries before but might take you a while to find...

The government website usually has some useful info.

Start here:

https://www.gov.uk/bankruptcy/restrictions

 

[bright_future]

Thanks again Lisa! I'm following the link

 

[Lisa Thomas]

You're welcome. Feel free to call me if you want a second opinion that BKY is the right route for you.

 

[Lisa Thomas]

Oh and of course if you need a friendly Liquidator ;-)