Liquidation of a company part of a group - consequences?

Discussion in 'Insolvency' started by antoine82, Feb 1, 2018.

  1. antoine82

    antoine82 UKBF Regular Free Member

    Posts: 170 Likes: 29
    Hi there, I currently run 3 coffee shops under the same trading name. The 3 of them are different limited companies, all of them being 100% owned by a holding company which I partially own alongside other investors.

    I had to close one of my coffees as the sales were not as good as expected (the failure is genuine, nothing to hide here, jus a bad investment). As a result, this company owes money to the council (business rates) and HMRC (VAT and NIN). I am considering the different options offered to me and I was wondering what would happen if I were to go for liquidation. Could my creditors go after the other companies (either trading companies or holding) ?
    Thank you very iuch for your help!
     
    Posted: Feb 1, 2018 By: antoine82 Member since: Oct 26, 2010
    #1
  2. Avner

    Avner UKBF Newcomer Free Member

    Posts: 25 Likes: 1
    Hi, assuming there are no cross guarantees offered by associated or holding company, which is very unlikely if rates and HMRC, it should not affect the others at all. How long have the other shops been trading for? Just checking if any issues with using the same trading name? Liquidating the loss-making business makes sense. Happy to discuss further if you want advice.
     
    Posted: Feb 1, 2018 By: Avner Member since: Nov 17, 2017
    #2
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  3. Gavin Bates

    Gavin Bates UKBF Regular Full Member

    Posts: 341 Likes: 60
    Hi

    As Avner has mentioned above you need to check for cross guarantees. Do you have a group VAT registration?

    Regards

    Gavin
     
    Posted: Feb 2, 2018 By: Gavin Bates Member since: May 9, 2016
    #3
  4. Gecko001

    Gecko001 UKBF Enthusiast Free Member

    Posts: 2,050 Likes: 315
    After liquidation of the failing coffee shop could some of the suppliers of that shop be left as creditors. If they were, could this have a knock on effect with the other coffee shops?
     
    Posted: Feb 2, 2018 By: Gecko001 Member since: Apr 21, 2011
    #4
  5. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    Posts: 8,660 Likes: 1,772
    Many leases now days require a pg from the directors normally signed at time of lease
     
    Posted: Feb 2, 2018 By: Chris Ashdown Member since: Dec 7, 2003
    #5
  6. Gecko001

    Gecko001 UKBF Enthusiast Free Member

    Posts: 2,050 Likes: 315
    Maybe i should clarify this as it seems like stating the obvious. The knock on effect to which I referred is suppliers of the failing coffee shop refusing to supply the other two coffee shops. This alone might be reason enough to not consider liquidation.
     
    Posted: Feb 2, 2018 By: Gecko001 Member since: Apr 21, 2011
    #6
  7. Mr D

    Mr D UKBF Legend Free Member

    Posts: 5,034 Likes: 492
    Quite likely to cancel any credit arrangements anyway?
     
    Posted: Feb 2, 2018 By: Mr D Member since: Feb 12, 2017
    #7
  8. antoine82

    antoine82 UKBF Regular Free Member

    Posts: 170 Likes: 29
    Hi thank you for your answers. I do not have any outstanding debts with the suppliers as I anticipated that problem.
    The only debts I have are with the council (business rate) and HMRC (VAT and NIN).

    And one more question. If I liquidate that company, would I still be able to trade as directors with the 2 other shops?

    Thank you again for your help!
     
    Posted: Feb 4, 2018 By: antoine82 Member since: Oct 26, 2010
    #8
  9. LiveNetworks Ltd

    LiveNetworks Ltd UKBF Regular Free Member

    Posts: 104 Likes: 23
    Not a liqidation expert, but the IP would be responsible for reporting fault that could lead to you being barred, but it doesn't sound like you've been complicit or deliberate in your actions leading to the insolvency so there's no obvious reasons to worry.
     
    Posted: Feb 4, 2018 By: LiveNetworks Ltd Member since: Jan 31, 2018
    #9
  10. Avner

    Avner UKBF Newcomer Free Member

    Posts: 25 Likes: 1
    You will be able to, dependant on how long you have traded them using the same or similar name (assuming you are a director of all the companies). If over 12 months, you can carry on as normal. If under 12 months, you will need to seek advice on the statutory exceptions and how to overcome this.
     
    Posted: Feb 5, 2018 By: Avner Member since: Nov 17, 2017
    #10
  11. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    Posts: 1,684 Likes: 208
    If you are using the same/similar name and you Liquidate, the Lqr can help you with the relevant Phoenix advert and notices to creditors.
     
    Posted: Feb 5, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #11