starting again

[future millionaire]

hi wondered if anyone can give me some advice on a situation?

i have to stop trading as i run a ltd company and now realise i am insolvent, about 10 months ago i lost £13000 to a company who went bust before paying me what they owed me and ever since i have been chasing my tail robbing peter to pay paul for such a long time but now have decided to stop and stair again i have some debts not a great amount about £4000. my question is if i go insolvent my machinery that is worth about the same £4000 will be taken away and sold for a very small % of what they are worth. but if i want to start again i need the same machinery to do my work as i'm sure everyone knows its hard enough to get a job these days but i know i can earn enough if i start over again,
so i have an idea and wondered if i could make it work,
sell my machinery to a family member for a smaller amount and let him rent it back to me so when i show my assets there wont be any as i wont own them just rent them, sorry to go on but just wondered how legal this would be to do this. and if so what kind of money could i sell somthing worth £4000 for without looking like i am taking the p--s? i would then give the money i got paid for the machinery to the or when the time comes

 

[MartCactus]

If you sell company assets whilst insolvent its likely to be deemed to be a sale at undervalue.

If people going bust were allowed to do this, everyone would borrow loads of money, buy loads of kit, sell it for next to nothing to a friend/family member and then wind up the company as insolvent.

 

[mhall]

I agree - be very careful as you could be charged for all manner of things as you are a Director of the company (I presume) and as such, must act with the best interests of the company (current company, not future) at heart.

Might even be worth using a liquidator and buying the assets of them just to keep you clean

 

[thedesigntailor]

This is good advice - don't do it!

 

[yorkshirejames]

If you sell company assets whilst insolvent its likely to be deemed to be a sale at undervalue.

If people going bust were allowed to do this, everyone would borrow loads of money, buy loads of kit, sell it for next to nothing to a friend/family member and then wind up the company as insolvent.

It depends....

What you need is a PREPACK. You first need to get some detailed advice from a professional (our company offer this service - whereabouts in the UK are you please?).

Does your company need all these machines?

 

[WarbyGK]

What about those businesses that you owe money to? It's not their fault that you weren't paid yet you're quite happy to allow them to struggle why you propose to run away and start again, with the same machinery that their money has funded!
You do have a duty as Director of a Limited company, and yes sometimes the easy option is tempting, but the harder option (digging yourself out this hole) is often the better option long term IF you wish to live up to your Forum name.

 

[OldWelshGuy]

Why not enter into a company voluntary arrangement? that might help. If you lay things out and truly are solvent but unable to cope with the debts, then the OR might well allow your new company to start again and do a deal with the equipment etc. I seem to remember someone on here pretty much did that!

 

[Dominic Taylor]

Methinks you need to slow down and fix the present before waxing lyrical about the future!

Loan from a bank perhaps?

 

[Dave Shaw]

It doesn't sound like you owe a great deal - can you not come to some arrangement with those you owe money to? If you cannot generate any money to do that then you should question starting up again at all. A CVA at this level would not be cost effective but an informal arrangement could resolve the issue.

In terms of selling the plant you do need to be careful that you are not undertaking a transaction at an undervalue, misfeasence or any other offence - if you are then you may end up being liable and could end up disqualified. However if you dispose of the goods for fair value and for cash (to be used to pay off the debts) then you may be able to avoid criticism.

Dave Shaw
totalitysolutions.com

 

[3 MORE YEARS]

Did you business make money before things went bad?

Have you thought about getting some silent investors in?

 

[mattbetts]

I would be very careful about prepacks and reopening..

 

[internetspaceships]

What about those businesses that you owe money to? It's not their fault that you weren't paid yet you're quite happy to allow them to struggle why you propose to run away and start again, with the same machinery that their money has funded!
You do have a duty as Director of a Limited company, and yes sometimes the easy option is tempting, but the harder option (digging yourself out this hole) is often the better option long term IF you wish to live up to your Forum name.

I couldn't agree more. It says a lot that you havent mentioned the people you owe money to in this post. I'm not saying that you should bail yourself out of this by hook or by crook but what I AM saying is that if you phoenix the company, your suppliers will never forget.

I do think you need to work out a way to make your company work as it is, because if you arent taking enough to turn around a £13000 loss in 10 months then being a millionaire is likely to be an awful long way in the future.

 

[Geoff T]

I agree with other posters on this, for a total debt of less than £4,000 - presumably spread over a number of creditors - you'll probably have more luck talking to your suppliers and asking for assistance to trade your way out of it...

Phoenixing - IMO - is contemptible...and in this case unnecessary...

 

[toddle2u]

I would be very careful about prepacks and reopening..

Any particular reason for this considering if done correctly it is perfectly legal?

 

[yorkshirejames]

I would be very careful about prepacks and reopening..

Why? From what perspective?