Selling indebted company for £1.00 - scam or not?

[Bergen]

Hi all,

I have some difficulties with paying back the BBL, the company is not trading anymore for 2 years, and now HMRC comes to me to claim the furlow back (used to pay my salary but did not pay the employer's taxes as I was in a very uncertain situation), then I have been jobless on Universal Credit with £450 a month.... This is to say that I'm now with a seriously looking amount to pay back which drives me mad.

Spoken to some Legal Practitioners over the phone a while ago and was ready to start my liquidation paying with my own money, but found some adverts online about possibility of selling my indebted company for £1.00 and completion within 3 days(?!). Cost ranging from 5 to 7k, and apparently I have a full transfer of liabilities to the new directors so I'm completely debt free.

When speaking over the phone to these people I was told to stay many horror stories like to stay away from legal practitioners as these will find any occasion to make me personally liable for most of the debt. If I had any expenses that are hard to justify or took personal loan from company and did not paid it back, I will be made liable, chased with recovery teams and certainly made bankrupt anyway. My property will be sold to pay anything I borrowed and did not paid back or to cover the expenses that may not look 100% justifiable.

Do anyone have and experience with both Legal practitioners or these company debt buyers to advise me on the route to take?
Are these debt buyers scammers or are legal practitioners to be avoided at all costs?
Thanks in advance.

 

[Clinton]

found some adverts online about possibility of selling my indebted company for £1.00 and completion within 3 days(?!). Cost ranging from 5 to 7k, and apparently I have a full transfer of liabilities to the new directors so I'm completely debt free.

Please provide examples of these ads or point us to the site/s making this offer.

 

[Ozzy]

Firstly, if you've signed any personal guarantees then it doesn't matter who takes over the business you have personally guaranteed the debts.

That aside, generally anything that seems too good to be true will be too good to be true.

 

[japancool]

If I had any expenses that are hard to justify or took personal loan from company and did not paid it back

Did you?

and now HMRC comes to me to claim the furlow back

Why are they claiming your furlough back? Were you claiming it as well as working?

 

[Newchodge]

Why are they claiming your furlough back? Where you claiming it as well as working?

Possibly did not run payroll, so no evidence it was paid to employee

(used to pay my salary but did not pay the employer's taxes as I was in a very uncertain situation)

 

[Bergen]

knowsley recovery
we buy any company
athertoncorporate

These are examples. The forum doesn’t allow to post the links

 

[Bergen]

Why are they claiming your furlough back? Were you claiming it as well as working?

Yes I did, but some time ago I received some document confirmation requests which i missed to reply to

 

[Newchodge]

Yes I did, but some time ago I received some document confirmation requests which i missed to reply to

Sorry, that does not make a lot of sense.

 

[japancool]

Cost ranging from 5 to 7k

So you pay them to buy your company, they get it struck off and are 7k richer. Sounds like a good business model, and your conduct while you were a director could still be investigated.

 

[Newchodge]

When speaking over the phone to these people I was told to stay many horror stories like to stay away from legal practitioners as these will find any occasion to make me personally liable for most of the debt. If I had any expenses that are hard to justify or took personal loan from company and did not paid it back, I will be made liable, chased with recovery teams and certainly made bankrupt anyway. My property will be sold to pay anything I borrowed and did not paid back or to cover the expenses that may not look 100% justifiable.

I would suggest that any organisation that resorts to these scare tactics to persuade you to do something that is supposed to be for your benefit is an organisation that should not be trusted with a penny.

 

[Bergen]

So you pay them to buy your company, they get it struck off and are 7k richer. Sounds like a good business model, and your conduct while you were a director could still be investigated.

Please read the thread, no mention to pay someone to strike the company

 

[Ozzy]

knowsley recovery
we buy any company
athertoncorporate

These are examples. The forum doesn’t allow to post the links

They're all the same outfit, with a remarkably little amount of statutory required information available on their website about who they are.

 

[Newchodge]

Please read the thread, no mention to pay someone to strike the company

The thread is a little confusing. You did say that

selling my indebted company for £1.00 and completion within 3 days(?!). Cost ranging from 5 to 7k

 

[Mark T Jones]

I'm about to start proceedings against a company now owned by Atherton Corporate (I have already objected to strike-off, which has been suspended).

https://www.gov.uk/government/publi...sport-ltd/decision-for-gregorys-transport-ltd Whilst digging, I came across this article.. Whilst not entirely relevant it does give a little bit of insight.

It will be interesting to see if/how they respond to the LBA I will be sending on Monday.

 

[Bergen]

The thread is a little confusing. You did say that

Nothing confusing about that, the thread is about selling an indebted company to a new director and shareholders, not about striking it down from a companies house register

 

[AlanJ1]

Nothing confusing about that, the thread is about selling an indebted company to a new director and shareholders, not about striking it down from a companies house register

What do you think the new owners will do? And who do you think they will blame if the strike off gets objected too?

 

[japancool]

Nothing confusing about that, the thread is about selling an indebted company to a new director and shareholders, not about striking it down from a companies house register

No one is talking about striking off.

 

[Mark T Jones]

No one is talking about striking off.

There is a strong suggestion that dissolution is the end-game

 

[japancool]

There is a strong suggestion that dissolution is the end-game

Yes indeed - and the mention of fees suggests that's how they make their money, which was what I was picking up on.

 

[Clinton]

Bergen, I have experience in this subject selling/buying busineses for £1. I've done a lot of research into this and written numerous articles, LinkedIn posts etc about this over the last several years.

You think you're washing your hands off a problem. You're not! I won't bother explaining all the traps and pitfalls in this kind of deal. I don't have the time to go into that and, well, I can't be bothered to be honest (as I'm sick and tired of people thinking they've found an easy route out and then moaning about it later when the brown stuff hits the fan).

What I will say is that you should take whatever deal they're offering you and show it to a good solicitor who specialises in business buying / selling transactions. Don't do that and you will regret it later.

 

[UK Contractor Accountant]

Has anyone hear of this company and are they legit?

Hi. Has anyone ever heard of had dealings with this company? National company rescue / atherton corporate They basically buy the shares in a business taking on all liabilities etc allowing you to walk away. If i went through a route like this would there be any risks to myself? Im guessing to...

www.ukbusinessforums.co.uk

 

[Elliot Green]

The question is why would a person (anyone) buy (even for £1) a worthless insolvent company, that has no assets presumably and just a BBL and has ceased trading?

Well, either such a person is on a mission that does not accord with the normal rules of a commercial business or alternatively they have an angle that converts their £1 into profit. If there is the slightest chance that you *might* have to contribute to the other person's pocket in a way that you were not transparently informed about then perhaps the matter warrants careful consideration before taking the plunge. This thread contains a number of 'health warnings' (to adopt the expression of another IP on a similar historical thread).

Liability for a BBL debt by a Director typically does not arise because it is a company debt and personal guarantees were not sought. If the BBL has been properly applied for then director liabilities do not usually arise from the BBL debt itself. What can happen is a Director can misapply for *their* economic benefit the BBL monies, instead of for the Company's economic benefit. It is when a Director does this they are at potential risk in respect of the loss they cause to the Company.

I am sure there are other IPs here who will be in a position to assist. If you want to chat on a no-obligation basis my number is 07974 246 243.

 

[DontAsk]

The question is why would a person (anyone) buy (even for £1) a worthless insolvent company, that has no assets presumably and just a BBL and has ceased trading?

Because they are charging £5k - £7k! Or should that be £4,999 - £6,999 after they paid the £1.

 

[Elliot Green]

Because they are charging £5k - £7k! Or should that be £4,999 - £6,999 after they paid the £1.

Exactly, which is why I said the advertised price of £1 conceivably warranted careful consideration. At those additional prices, it is probably more expensive than many an IP would charge to put a company into Liquidation and for the matter to be dealt with properly. We typically charge for a simple BBL based CVL a lot less.

However, the other issue of course is that the assets of a business such as for example only, an Overdrawn Director's Loan Account ("ODLA") do not vanish because the shares are sold. Any agreement that was reached to settle the ODLA (with the share sale) could in any event potentially be challenged by a future Liquidator as a Transaction at Undervalue under Section 238 of the Insolvency Act 1986.

 

[japancool]

However, the other issue of course is that the assets of a business such as for example only, an Overdrawn Director's Loan Account ("ODLA") do not vanish because the shares are sold. Any agreement that was reached to settle the ODLA (with the share sale) could in any event potentially be challenged by a future Liquidator as a Transaction at Undervalue under Section 238 of the Insolvency Act 1986.

Judging by Mark's article, they are buying, pocketing the fees then striking the company off.

 

[Gyumri]

Judging by Mark's article, they are buying, pocketing the fees then striking the company off.

There not even doing that - there's no need to. They simply step down as a director leaving the company rudderless. They then receive a polite begging letter from CH imploring the shsreholders to appoint a director in their place.

There are no recorded prosecutions by the Secretary of State for simply ignoring such letters - @Elliot Green may know of a case but I don't.

As for the ODLA that won't concern the OP as there is no transaction at an undervalue - the company still has the same asset - but with no directors who is able to recover anything for the creditors?

The whole purpose in selling the company for a notional £1 is to shaft the creditors.

 

[Mark T Jones]

Judging by Mark's article, they are buying, pocketing the fees then striking the company off.

It suggests that, but doesn't clearly state it.

I'm hoping to find out for sure next week

 

[Elliot Green]

There not even doing that - there's no need to. They simply step down as a director leaving the company rudderless. They then receive a polite begging letter from CH imploring the shsreholders to appoint a director in their place.

There are no recorded prosecutions by the Secretary of State for simply ignoring such letters - @Elliot Green may know of a case but I don't.

As for the ODLA that won't concern the OP as there is no transaction at an undervalue - the company still has the same asset - but with no directors who is able to recover anything for the creditors?

The whole purpose in selling the company for a notional £1 is to shaft the creditors.

What you tend to find is that misconduct such as leaving a company rudderless for example only, will often be added to a collection of misconduct points that may lead to proceedings if the Secretary of State is so inclined.

In relation to an ODLA what *could* happen is the party who purchases the shares could appoint a Director and that Director could then seek to recover an ODLA if one were outstanding.

 

[Michael Loveridge]

Hi all,

I have some difficulties with paying back the BBL, the company is not trading anymore for 2 years, and now HMRC comes to me to claim the furlow back (used to pay my salary but did not pay the employer's taxes as I was in a very uncertain situation), then I have been jobless on Universal Credit with £450 a month.... This is to say that I'm now with a seriously looking amount to pay back which drives me mad.

Spoken to some Legal Practitioners over the phone a while ago and was ready to start my liquidation paying with my own money, but found some adverts online about possibility of selling my indebted company for £1.00 and completion within 3 days(?!). Cost ranging from 5 to 7k, and apparently I have a full transfer of liabilities to the new directors so I'm completely debt free.

When speaking over the phone to these people I was told to stay many horror stories like to stay away from legal practitioners as these will find any occasion to make me personally liable for most of the debt. If I had any expenses that are hard to justify or took personal loan from company and did not paid it back, I will be made liable, chased with recovery teams and certainly made bankrupt anyway. My property will be sold to pay anything I borrowed and did not paid back or to cover the expenses that may not look 100% justifiable.

Do anyone have and experience with both Legal practitioners or these company debt buyers to advise me on the route to take?
Are these debt buyers scammers or are legal practitioners to be avoided at all costs?
Thanks in advance.

The short answer is yes, these companies are a scam. They are screwing fees out of people by selling them scare stories.

Your situation sounds like a fairly typical small company insolvency. As has often been said on this forum there is no justification for paying ANYTHING to ANYBODY. Although you can't apply to strike the company off, as it has debts, if you just do nothing it will eventually be struck off the register anyway for failure to file accounts etc.

You can't be pursued personally for the company's debts unless you've guaranteed them or acted in breach of the law, such as trading whilst insolvent. But even if you have a potential liability to the company the only person who would pursue such a claim is a liquidator, and there's virtually no chance of anyone appointing a liquidator as it costs money.

So tell them to get stuffed, and instead spend the money on something enjoyable!

 

[WaveJumper]

A website that is short on detail, no proper contact or company information is I would have thought probably to be avoided at all costs, especially when it sounds to good to be true. As others have mentioned short answer a scam. If you follow the bread crumbs the "director" (who I shell not name but seems to reside in Scotland) has several companies to his name. In short follow the more sensible advice by those posted above.

 

[Elliot Green]

One of these websites appears to say it is not interested in prior Director conduct or withdrawals. In theory, it is I suppose possible for the purchaser of shares to have no need to consider the same. But when the company is insolvent the new shareholder(s) cannot ratify any former misconduct of the Directors using the Duomatic principle. As a result, the original Director would still appear to be on the hook for any historic breach of duty / misfeasance.

Another potential problem with this is if the selling Director resigns (and there should be a Director to take over as a UK company has to have a Director) then any successor Director (who might be appointed by the purchaser) may well have an obligation to consider the historic conduct of the selling Director.

 

[dylanmarlais]

Hi all,

I have some difficulties with paying back the BBL, the company is not trading anymore for 2 years, and now HMRC comes to me to claim the furlow back (used to pay my salary but did not pay the employer's taxes as I was in a very uncertain situation), then I have been jobless on Universal Credit with £450 a month.... This is to say that I'm now with a seriously looking amount to pay back which drives me mad.

Spoken to some Legal Practitioners over the phone a while ago and was ready to start my liquidation paying with my own money, but found some adverts online about possibility of selling my indebted company for £1.00 and completion within 3 days(?!). Cost ranging from 5 to 7k, and apparently I have a full transfer of liabilities to the new directors so I'm completely debt free.

When speaking over the phone to these people I was told to stay many horror stories like to stay away from legal practitioners as these will find any occasion to make me personally liable for most of the debt. If I had any expenses that are hard to justify or took personal loan from company and did not paid it back, I will be made liable, chased with recovery teams and certainly made bankrupt anyway. My property will be sold to pay anything I borrowed and did not paid back or to cover the expenses that may not look 100% justifiable.

Do anyone have and experience with both Legal practitioners or these company debt buyers to advise me on the route to take?
Are these debt buyers scammers or are legal practitioners to be avoided at all costs?
Thanks in advance.

 

[dylanmarlais]

How much would it cost to liquidate the company? You could get a fixed fee online from some companies. The business model of the proposed buyer of your shares is to buy your shares for £1 and liquidate the company itself for less than £7,000. But it’s easier and more convenient for you to sell the shares.

 

[Elliot Green]

How much would it cost to liquidate the company? You could get a fixed fee online from some companies. The business model of the proposed buyer of your shares is to buy your shares for £1 and liquidate the company itself for less than £7,000. But it’s easier and more convenient for you to sell the shares.

How does selling shares solve the problem?

 

[WaveJumper]

And still be on the hook your not reading the posts in full

 

[dylanmarlais]

And still be on the hook your not reading the posts in full

I assume HMRC are claiming from the company.

 

[Elliot Green]

There not even doing that - there's no need to. They simply step down as a director leaving the company rudderless. They then receive a polite begging letter from CH imploring the shsreholders to appoint a director in their place.

There are no recorded prosecutions by the Secretary of State for simply ignoring such letters - @Elliot Green may know of a case but I don't.

As for the ODLA that won't concern the OP as there is no transaction at an undervalue - the company still has the same asset - but with no directors who is able to recover anything for the creditors?

The whole purpose in selling the company for a notional £1 is to shaft the creditors.

The Companies House prosecution statistics do not *appear* to completely accord with the no prosecution point. If there is no Director then it is probable no Companies House filing can be properly done. Leaving aside registered Director v de facto Director issues.

The prosecution statistics appear to be here https://www.gov.uk/government/stati...se-management-information-tables-2021-to-2022

Of course there is the separate point about compliance with legislation on its own v compliance to avoid prosecution.

 

[Lisa Thomas]

How much would it cost to liquidate the company? You could get a fixed fee online from some companies. The business model of the proposed buyer of your shares is to buy your shares for £1 and liquidate the company itself for less than £7,000. But it’s easier and more convenient for you to sell the shares.

£2,900 for a compulsory liquidation via court or fees starting from £5k upwards for a CVL.

 

[Elliot Green]

How much would it cost to liquidate the company? You could get a fixed fee online from some companies. The business model of the proposed buyer of your shares is to buy your shares for £1 and liquidate the company itself for less than £7,000. But it’s easier and more convenient for you to sell the shares.

For a reasonably simple CVL with Covid-Finance issues you can potentially anticipate fees of £3,000 upwards but it depends as ever on the circumstances and your negotiating skills.

 

[ABATES]

knowsley recovery
we buy any company
athertoncorporate

These are examples.

hi my company has depts it cannot pay and will be going bust is it worth selling the company and paying the fee's to them ? see their email below they are called Clear company rescue.





email from them
1. You will not be associated with the company at the time of liquidation,
avoiding reputational damage
2. All historical, current and future liabilities are passed to the new Director
Shareholder
3. The sale process is dealt with by a registered Solicitor and we cover all
legal costs and fees to the new Directors etc.
4. The process can be completed within 3 to 5 days
5. You don’t need to involve Insolvency Practitioners
6. An Insolvency Practitioner will sell the assets of the company to pay their
fees (we don’t do this)
7. An Insolvency Practitioner will take control of your bank account and remove
any funds we don’t do this
8. An Insolvency Practitioner will ask you to replace any funds you have taken
from the account in the last 3 years we don’t do this