Proposal to strike off and BBL

[macfanuk]

Afternoon all.

I have a couple of ltd company's and I've just discovered that I've missed the deadline to submit accounts for one of them and there's a proposal to strike off in progress (although it says on companies house that it's dated 28th June 2022).

This particular company has not been trading for the past year, as it became unviable following covid, however, as it has a BBL outstanding, I've been keeping it limping along just to pay the BBL back (I've been paying money into the company account to cover the BBL each month).

However, I'm now in a position where I need to pay an accountant to do accounts for the company for both CH and HMRC and just don't want to keep throwing money away (I have no problem with paying the BBL but I don't see the point in paying for accounts to be done when the company is dead in the water).

What will happen to the BBL if the proposal to strike off goes through? Is it worth speaking to the bank to see if I can make arrangements outside of the company to pay the BBL back so that the company can be closed? Or should I cough up for an accountant and keep the company limping along?

I really wish the company could be 'dormant' while repaying the loan...would make things much simpler

 

[ChrisCallaghan]

Hello @macfanuk ,

What I (and most insolvency advisors) have been seeing is that the BBL lender will object to the strike of proposal, and that the proposal will then be suspended.

If the strike off action was to actually go through, the BBL would effectively be written off.

 

[ChrisCallaghan]

In addition to the above:

If the company is no longer viable, then maybe it is time to consider closing the company? If you took no further action, it is likely that the BBL lender will object to the strike off proposal, but I am seeing that they will eventually cease objecting after 12 - 18 months, and the strike off goes through. This is similar to what is known on this forum as "The Spongebob Plan" - see the following link:

CLOSING A LIMITED COMPANY WTH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER

CLOSING AN INSOLVENT LIMITED COMPANY WITH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER If a company is unable to carry on trading due to becoming insolvent the standard procedure for closing it down is for the directors to appoint an Insolvency Practitioner to liquidate it...

www.ukbusinessforums.co.uk

Alternatively, if you would like to see the company closed quicker you could consider instructing an insolvency practitioner to liquidate your company. So long as you have used the BBL for the economic benefit of the company, and that there is not an overdrawn directors loan account, then a liquidation would close the company much quicker and write off the BBL.

Myself or any of the other insolvency regulars on UKBF would be happy to talk you through the liquidation process if you would like some free advice. Please inbox me if I can be of any help.

 

[Gyumri]

What will happen to the BBL if the proposal to strike off goes through? Is it worth speaking to the bank to see if I can make arrangements outside of the company to pay the BBL back

The SpongeBob plan is worth looking at for guidance. If you don't file accounts companies house will eventually strike off the company. There's nothing to stop you continuing to pay off the bbl in the meantime if your conscience is troubling you, otherwise the bbl will die with the company. ?

 

[achilles01]

In addition to the above:

If the company is no longer viable, then maybe it is time to consider closing the company? If you took no further action, it is likely that the BBL lender will object to the strike off proposal, but I am seeing that they will eventually cease objecting after 12 - 18 months, and the strike off goes through. This is similar to what is known on this forum as "The Spongebob Plan" - see the following link:

In my case it is HMRC who are objecting to the strike off action. Can HMRC object indefinitely or will the company be struck off despite their objections? What is the timeline for Companies House to dissolve the company despite the HMRC objections, i.e. is it 12 months, 18 months or how long is it exactly? Surely it cannot go on forever. Is there anything I can do to speed up the process?

 

[Frank Wessely]

The SpongeBob plan is worth looking at for guidance. If you don't file accounts companies house will eventually strike off the company. There's nothing to stop you continuing to pay off the bbl in the meantime if your conscience is troubling you, otherwise the bbl will die with the company. ?

And the Bank will then claim under their Government-backed guarantee, so they will not lose out.

 

[japancool]

And the Bank will then claim under their Government-backed guarantee, so they will not lose out.

Apart from the taxpayer, of course.

 

[Frank Wessely]

In my case it is HMRC who are objecting to the strike off action. Can HMRC object indefinitely or will the company be struck off despite their objections? What is the timeline for Companies House to dissolve the company despite the HMRC objections, i.e. is it 12 months, 18 months or how long is it exactly? Surely it cannot go on forever. Is there anything I can do to speed up the process?

Hi achilles01, you could approach the Bank to see if they might accept a reduced one-off payment given the broader circumstances. That’s worked in the past.

 

[Frank Wessely]

Apart from the taxpayer, of course.

Correct.

 

[japancool]

Correct.

Sorry, I misread your post - I thought you wrote "no one will lose out". Apologies.

 

[ChrisCallaghan]

In my case it is HMRC who are objecting to the strike off action. Can HMRC object indefinitely or will the company be struck off despite their objections? What is the timeline for Companies House to dissolve the company despite the HMRC objections, i.e. is it 12 months, 18 months or how long is it exactly? Surely it cannot go on forever. Is there anything I can do to speed up the process?

Hi Achilles,

I typed up a reply to the DM you sent me, but I've just checked my messages and it doesn't seem to have been sent!

In theory, yes a creditor such as HMRC can object indefinitely. I recently spoke to a company director who has now been waiting 2+ years for his strike off application to go through, due to HMRC objecting. Pre-Covid you could usually rely on HMRC to take Winding Up action within 12 months but this doesn't seem to be the case at the moment. From others I have spoken with, it appears HMRC are working down a priority criteria of companies to wind up, largely based on the size and age of the HMRC liability. I'm sure we will get back to the pre-Covid normality of HMRC winding up 100+ companies a week, but it will just take a bit more time till we get there.

So.... I don't believe there is anything you can do to speed up this process at the moment, other than instructing an IP firm for a Voluntary Liquidation. I will DM you an idea of what the firm I work for would quote for a basic Voluntary Liquidation.

Assuming you do not wish to go down the Voluntary Liquidation, I would advise re-reading SpongeBob's guide (link in this thread) and bearing with it. Either your strike off application will go through or HMRC will come forward to wind up your company.... it will just take a bit more time than it would've done pre-Covid.