insolvency advice

[LizziB]

Hi
I own a deli/coffee bar, now running at a loss due to hardly any trading throughout lockdown. I have put it up for sale due to tragic covid trading with the hope that someone may take a punt for the future post covid. I have received an offer on the fixtures and fittings only. If I accept this offer and put the money in the pot of what I have left of the BBL and money in the bank it will still not be enough to cover costs to creditors IE; rent and BBL. What is the best way forward.

Thanks

 

[UK Contractor Accountant]

Sole trader, partnership, Limited company or LLP?

 

[Mr D]

The business may not sell. Many of those put for sale do not sell, could be years before you do find a buyer - and what if they offer you a fraction of what you want?

A lot will depend on your business type.

Sometimes businesses to under without enough in the pot to pay everyone. Sometimes not enough to pay anyone.

 

[Overloaded]

I sold my business in March (amazingly) well fixtures and fittings Facebook page , signed over lease of shop etc - this all completed in June , so all done in lockdown

I did not think of it as what money could I get for the sale , but what liabilities did it relieve me of - and they were a lot

I maybe could have sold for more another time , but it’s only worth what someone is willing to pay

Getting rid of the asset finance (signed over) the lease (signed over ) was worth it for those things alone

my shop was draining me - (good business , massive theft I couldnt recover from)
And now life is great , money in my pocket again , no stress etc - stopped pumping money in to cover liabilities

I would seriously consider the offer , hospitality has a bumpy ride ahead

I held on to my business for far to long after the theft , because I didn’t want to end a shop the community loved, and didn’t want to ‘fail’

but in the end I realised everyone is getting paid but me and I’ve worked 40 hours a week for nothing and putting money in - why ? Time to put my family first and stop being so proud .

 

[ChrisCallaghan]

Hello LizziB,

Firstly I am very sorry to hear about your situation. As UK Contractor Accountant asks, do you run your business as a sole trader or through a company structure, eg Ltd or Llp?

If it is a company structure then it would be best to take insolvency advice regarding the sale of the assets and how those funds are spent. Likewise if you run the business as sole trader, you may wish to consider taking insolvency advice about your options for dealing with the left over creditors and BBLS.

 

[Lisa Thomas]

As others have stated, we cannot give you advice as it depends on the type of business you are running.

If you can let us know we can then tell you what your options are.

 

[MikeJ]

It's a limited company. It says so in her profile.

 

[MikeJ]

More info here...

https://www.ukbusinessforums.co.uk/threads/insolvency-winding-up-business.407561/

 

[ChrisCallaghan]

Well spotted MikeJ.

LizziB, assuming your profile details are correct and your business is Ltd, it would certainly be worth contacting a licensed insolvency practice. If the sale of the fixtures and fittings will not be enough to pay your creditors, then those funds could instead be used to place the company into a Voluntary Liquidation. This would close your company, and potentially write off much (maybe even all) of the company's debts. Most insolvency practices would be happy to offer you free consultation to explore how this works and what the impact on you would be.

May I ask how much is being offered for the company assets? Do you feel the offer is fair based on what the assets are worth?

 

[Lisa Thomas]

You will need c£3-4k to Liquidate in Court and probably a bit more than that to Liquidate the Company voluntarily.

Are there any employees, including yourself? If so the government scheme will pay most, if not all monies due to them for wage/holiday/pension arrears and notice and redundancy pay if you Liquidate..

 

[ville1401]

If your ltd, rad up on the sponge bob threads in here and do it yourself.