Liquidation Turmoil

[Sarahbear413]

Hi,

I feel like I'm in a difficult place. My limited business has been trading for 7 years and basically is my love & my life. We have 2-3 main clients who are large high street companies and we have worked continuous with them for 7 years. Recently, due I think to Brexit they have no required the usual work (we work in design & display) so I have not had any work for 5 months. During this time I have build and paid for a new website and looked to get more clients, which has been difficult but positive and I am now working on 3 live briefs although none of them are secured. In the meantime I will get more work from the existing clients but could be much later in year.

Due to no work in 5 months I have struggled to keep business afloat. I have a combined £26K HMRC bill VAT & Corp tax that I have payment plan on but cant keep up payment plan. £4K a month. I also have an overdue fright company bill of £9K ( i have paid £3.5 already as this was £12.5 originally)

I cant keep up with HMRC payments and cant pay £9K freight bill.

I have meet with several liquidators and they have valued "assets" at £3.3K

My registered company name at Companies house is not known to exsisiting clients (only through accounts/finance) as I have always traded under another (similar) name and the trading name is what is on my website and all company info etc.

The liquidator says I can buy back assests including trading name etc and continue to trade under new company but I am worried about how this will work as I will have to change company info etc with existing clients and am afraid they will no longer do business with me. I am also worried that the new potential clients I have worked with will look into the new company and see that we have no trading history and obviously I will lose the 7 years of business history I have.

I have a director loan with current business which is approx £15K- I do not own a property but am afraid the liquidator will come after me after I have agreed to liquidate, although he says he wont.

I received a letter yesterday from fright company who have instructed a solicitor and say I have 7 days to pay £(

I have been keeping a handle on everything until this point but as it is all coming to a head I am really upset and confused about what to do for the best. Can any one give me any advice or help?I am alone in the business and I have put evetying into it, I do not want to lose it but I dont know what to do for the best. Please help.

Sarah

 

[MikeJ]

My registered company name at Companies house is not known to exsisiting clients (only through accounts/finance) as I have always traded under another (similar) name and the trading name is what is on my website and all company info etc.

This is important. What's on your invoices? Are the suppliers aware they are trading with a limited company?

If not, then you are personally liable.

 

[Lisa Thomas]

Hi Sarah

Sorry to hear you have been having a tough time of it.

The IP is no doubt referring to the Phoenix regulations, which state you can't be a Director with another Company with the same or similar name for 5 years unless certain exemptions apply.

One of those exemptions is giving notice to creditors of your intentions and acquiring the assets from the Liquidator.

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As regards the DLA - has the IP agreed a repayment plan with you in writing? Personally I would want some comfort from the proposed Liquidator before I decided to proceed.

Let me know if you want a second opinion.

The Company is insolvent and regardless of your conflict with the DLA, you need to take steps to mitigate the position and it sounds like Liquidation may be the answer.

Of course customers may not want to continue with Newco once Oldco has been Liquidated but unfortunately this will always be something you wont get 100% certainty on until after it comes out in the wash. You could of course approach the customers beforehand but ultimately this potential problem with your future trade shouldn't affect your decision to put the existing Company through an insolvency procedure (if that is what is required).

 

[Sarahbear413]

Hi Mike, on my invoices is my trading name the company no and vat number of limited company

 

[Sarahbear413]

Hi Lisa,

What is an IP?

Yes that is what I have been advised, I can continue to trade a new company with trading name of old company so my website/name etc continues but I have to advise creditors (HMRC & Freight company) and the new company bus the assets from the old company. The proposed liquidator has not put in writing anything about the Director Loan as my account is trying to get the figure down at the moment but I can ask him to do this before I agree?

Thank you for your message

 

[Sarahbear413]

Hi Lisa,

One more question.

At the moment I have another company that is registered and has a bank account VAT reg etc it is a different name entirely to my business in question. I registered this company 15 months ago as I wanted to use the name in the future. I plan on changing the name of this company through companies house to the trading name of the current company. I do not know weather to change the name now before I liquidate or after when the new company has bought the assets from the old company?

Thanks again

Sarah

 

[Lisa Thomas]

Hi Lisa,

What is an IP?

Yes that is what I have been advised, I can continue to trade a new company with trading name of old company so my website/name etc continues but I have to advise creditors (HMRC & Freight company) and the new company bus the assets from the old company. The proposed liquidator has not put in writing anything about the Director Loan as my account is trying to get the figure down at the moment but I can ask him to do this before I agree?

Thank you for your message

Sorry - An IP is an Insolvency Practitioner

Personally I would want some written comfort as regards the DLA before Liquidation.

 

[Lisa Thomas]

Hi Lisa,

One more question.

At the moment I have another company that is registered and has a bank account VAT reg etc it is a different name entirely to my business in question. I registered this company 15 months ago as I wanted to use the name in the future. I plan on changing the name of this company through companies house to the trading name of the current company. I do not know weather to change the name now before I liquidate or after when the new company has bought the assets from the old company?

Thanks again

Sarah

If you want to avoid all the hassle of the Phoenix legislation it would be best not to use the same or similar name of the Company you are liquidating so it would seem sensible not to change the name of your second Company and continue trade going forward in that Company.