Striking Off/ Liquidation

[PatrickStar]

A Limited company that has ceased trading, has very little to no assets and 3-4 creditors two are directors (loans to business) and one is the bank approx 6k. None of the bank loans were personally guaranteed.

The advice from an Insolvency Practicioner/Administrator was to cease trading and apply for strike off. The company has applied for strike off.

The bank has by now finally sent a demand for payment in full within 18 days.

What to do next?

 

[jim_price]

I would suggest you write to the bank informing that the company has ceased trading and that if has no assets with which to settle the debt. Also inform them that there are no funds for a formal insolvency process and as such the striking off procedure has commenced.

 

[PatrickStar]

All relevant and legally required letters would have been sent out by recorded delivery at the appropriate times. So that has all been covered.

And you could say the bank seem to have ignored much of this.

 

[akirk]

The bank can object to / stop the striking off so you can not ignore them...

Alasdair

 

[PatrickStar]

In that scenario what would be the options? The business being limited and having little or no assets and under current legislation bound to cease trading
and apply for strike off. Stoping this gains nothing.

What would be the appropriate responses and or actions?

Would or should a director/debtor apply for compulsory liquidation?

 

[akirk]

won't stop the bank they will pursue their money, esp. if you don't talk to them. most of the banks have a team for businesses in trouble - they are the ones to talk to, they will advise you - they will want to be involved - if there is no option other than striking off it won't harm you to talk to them first.

Alasdair

 

[PatrickStar]

The business would have tried talking to their bank well before hand to secure additional funding/ solutions.

a) Directors are obliged by law to cease trading when ther is a risk of trading whilst insolvent.
b) The business is a separate entity, unless otherwise agreed all debts remain with the business, hence ltd status
c)The bank cannot claim precedence above other debtors

Given that banks will pursue- what would be the options.

 

[akirk]

You are correct in what you say...

however, a business does not need to strike off to cease trading
it should cease trading and then it should talk to its debtors - as a matter of courtesy if nothing else.

If the correct answer is striking off then the bank will support it - but they need to be involved - to not do so is likely to leave a bad rapport between directors and bank...

Alasdair

 

[PatrickStar]

Say that's happened and the bank were less than than helpful or attentive. So we are at the striking off stage and a month and half till either the bank seeks to stop this or it goes through.


What next.....

 

[akirk]

Not sure what else to say - this is a forum, not a legal helpline

If the business owes money to the bank then talk to the bank
If they say you can't strike off, then it is up to them to tell you what else to do - to liquidate / etc. Alternatively you can choose to ignore them and strike off and see what happens...

I am not sure what you want - you either are in dialogue with the bank - in which case they will tell you what they want, or you are not in which case do as you wish and see what happens

Alasdair