Spongebob method?

[cvf18]

Hi all

I've been doing quite a bit of research lately and came across the spongebob plan post to strike off a company. The post is now a few years old so I wonder if it's valid now and also if it might suit my circumstances.

At the moment there is around £25k in debt owed between bank overdraft, HMRC and a loan from funding circle. None of these are personally guaranteed debts. There is also 2 director loans owing the directors money (rather than in deficit).

There now no way to service the debts due to a number of issues. I was hoping to move on the company to someone else but that essentially went badly and left me in this situation. We have stopped trading as of 7th January.

So I'm wondering if this plan might be the most effective way to move forward as there are also no valuable enough assets in the company to pay for the services of a IP.

I'm keen to get this moving as soon as possible before we miss any regular payments. Which so far we've managed to avoid.

The only added complexity is that I have another company that I own (which is now my main focus and the reason I was trying to move the old company onto someone else to run) and both have the same registered address, could that cause any problems?

Any advice appreciated.

 

[Lisa Thomas]

Hi sounds as if the best option might be to dissolve the Company.

See here for details:

https://www.gov.uk/government/publications/company-strike-off-dissolution-and-restoration

The registered Company address might cause issues with bailiffs etc visiting the 2nd Company until the 1st one has been dissolved.

Did the 2nd Company acquire any assets off the old Company?

Is it using the same or similar name?

 

[cvf18]

Hi, thanks for your reply.

The companies are both in completely different, in name and operation, although the directors are directors for both companies.

The old company is a marketing company and the main focus is an online retail company (with significant assets on site such as stock). Hence the worry.

 

[Blaby Loyal]

Is the registered address of the defunct company the same as the trading address for the ongoing company?

 

[cvf18]

Yes that's correct. I'm wondering if changing the address of the old company, to say my home address might be the best step to take before sending in the striking off form?

 

[Blaby Loyal]

I'd be inclined to leave things as they are to be honest.

Changing things to a personal address is not a good idea.

In my experience the only creditor likely to cause you any grief would be a trade creditor with an axe to grind.

Belt and braces, have a copy of the lease to hand to prove the premises are leased to the ongoing company and not the old one: just in case it goes pear-shaped and some idiot does turn up to the address. It shouldn't do though.

 

[Ian J]

At the moment there is around £25k in debt owed between bank overdraft, HMRC and a loan from funding circle. None of these are personally guaranteed debts.

Are you sure that the Funding Circle loan isn't guaranteed as it's pretty standard for them to ask for PGs

 

[Mr D]

PG or no PG it cannot affect the decision to close or how the company funds are disbursed. Becomes a personal problem thereafter.

 

[Blaby Loyal]

Are you sure that the Funding Circle loan isn't guaranteed as it's pretty standard for them to ask for PGs

Yes, I spotted that as well. This would be the first FC lend I've come across with no PGs

 

[Lisa Thomas]

I've come across a few without PGs. The ones that have PGs have, in the main, been worthless in any event...!

 

[Spongebob]

Hi all

I've been doing quite a bit of research lately and came across the spongebob plan post to strike off a company. The post is now a few years old so I wonder if it's valid now and also if it might suit my circumstances.

Yes, The Spongebob Plan is still as valid as ever.

A development in the last couple of years has been the introduction of the annual Confirmation Statement, which has to be filed by all companies with Companies House.

Failure to submit the Confirmation Statement results in automatic dissolution of the company around 12 weeks later. This is proving a very quick and painless method of killing off an unwanted company, particularly if the CS is due soon.

I've not yet got to the bottom of why it is the case, but it appears that creditors (including HMRC) never object to the dissolution of a company in this manner. Unlike filing a form DS01 to apply to have a company struck off, there is no requirement to inform creditors or other interested parties that the company is to be dissolved. Unless they are constantly monitoring Companies House or the London Gazette, they will not know of the impending strike off.

When is the Confirmation Statement for your company due?

 

[OMGVape]

Failure to submit the Confirmation Statement results in automatic dissolution of the company around 12 weeks later. This is proving a very quick and painless method of killing off an unwanted company, particularly if the CS is due soon.

I got my reminder letter this week saying our CS is due. It listed the penalties for failure to submit, one of which was an unlimited fine !!

 

[Mr D]

I got my reminder letter this week saying our CS is due. It listed the penalties for failure to submit, one of which was an unlimited fine !!

A fine on a company that's going to dissolve...?

 

[OMGVape]

A fine on a company that's going to dissolve...?

I read it as a fine for the directors for failure to submit.

 

[Mr D]

Thanks, that makes more sense OMGVape.

 

[Blaby Loyal]

The Courts would be clogged with cases and CH would grind to a halt if it pursued prosecutions for non-filing. Imagine the drain on the public purse in costs.

 

[Spongebob]

I have never heard of anyone ever being prosecuted for failing to submit a Confirmation Statement.

If it really worries you, resigning as a director before it is due would solve it, and give CH even more reason to strike off the company. They don’t like directorless companies.

 

[cvf18]

Thank you all for your comments, it's greatly appreciated.
I've filled in the form and will post it off today. The hardest part is how the hell I pay the fee, I think I've only ever owned one cheque book in my lifetime!

If it comes to it and FC is PG'd I'll have to deal with it personally. The other £19k owed elsewhere would be a massive weight lifted so that I can focus on my other business. There doesn't seem to be too much advice around for people wanting to move onto something else.

Ultimately looking back I've not dealt with the old company properly and should have insisted it was signed over to the person running it and not let them run it into the ground, but hindsight is 20/20 as they say. Fingers crossed this works.

 

[cvf18]

By way of update...
I've had no response from creditors to the letters that I sent to them. Only the bank writing to me to now recall the overdraft and HMRC chasing letter for their outstanding. Both threatening legal action.

However the application to strike the company off seems to have been objected based on the status at companies house. But again as yet no correspondence to say who has rejected it. Any further advice on what the best course of action may be next please?

 

[Lisa Thomas]

HMRC is the likely culprit. You will just have to keep trying to file the DS01.