Voluntary insolvency questions

[Janemorley74]

Hi, Sorry is this post repeats anything from others in the past.

I own two businesses that operate from the same location. One was recently set up this year the other a few years ago.

The first one is the one that's under threat. I have outstanding bounce back loan, supplier debts, hmrc debts, etc

The second one is OK, more profitable and working well. This one I'm looking at re locating to a rates free property.

1) is the second ltd company safe? From the first one.
2) is it best to re locate then seek a voluntary insolvency?
3) can there be any come back over similar business types? For example if my second business started selling simular products as the first later on.

Thanks
Jane

 

[japancool]

3) can there be any come back over similar business types? For example if my second business started selling simular products as the first later on.

The first thing that springs immediately to mind is artificial separation of VAT.

Do your businesses currently do similar things?

 

[WaveJumper]

So many questions spring to mind on the subject of separation (as mentioned above) use of BBL etc but putting all that to one side for the moment just walking away from company no1 (leaving the IPO;s to comment further) you are going to have to disclose to new landlord, insurance company and probably lastly your bank that you were the director of an insolvent company which will potentially put up your costs

 

[DWS]

You have lots of bits of information going over 4 or 5 threads so it’s difficult to keep track on the actual situation.
From what I can gather you have a hair salon but have 2 Companies, one of these recently had a VAT compliance check to see if you had breached the threshold which according to your other posts it seems you may have.
Hairdressers are high risk with HMRC and notorious for enquiries, especially for VAT so trying to close it down whilst a compliance check is ongoing would be a red flag.
As far as the other Company is concerned, is this one VAT registered?
If not and and HMRC decide that the two Companies should be treated as one for VAT purposes then you may well need to account for VAT from the same date as the first Company breached the threshold or from when the second Company was formed.
I am sure the IP’s on here will know more but very unlikely you will be allowed to dissolve the Company with an outstanding BBL, and HMRC are more than likely to object as well.
As far as the other Company being safe, if VAT registered then maybe okay but if not it may well be dragged into the enquiry, I know you said you had an accountant, what has their advice been on this?
Who advised setting up 2 separate Companies?
Can you show that both Companies are separate? Different customer base, premises, bank accounts? If not it may be a problem.

 

[Porky]

@Janemorley74
Hi Jane,

Go and have an “off the record chat” with an IP, you can have a fairly open confidential chat before you appoint them when everything is strictly by the book.

If both business are at the same address and have similar directors then they are connected. You want to keep business 2 away from business 1.

Frankly I would probably pay the £5k or whatever the IP wants and put company 1 into VL and pre pack get coy 2 to buy any assets / good Will from it.

The BBL may give you a headache for repayment / terms but that will take time and the revenue will no doubt make their claims but at the end of the day, if you appoint a decent IP they will guide you through it and they will do everything by the book so as long as you don’t do anything illegal you will be OK

At the moment IP is the business to be in, with so many businesses still going under you are not on your own.your situation sounds a little messy but it’s not an insurmountable issue you can get this sorted.

Stop posting in forums and pick the phone up, get the process started, good luck. You will soon feel better once you have a plan in action.

 

[Lisa Thomas]

Hi, Sorry is this post repeats anything from others in the past.

I own two businesses that operate from the same location. One was recently set up this year the other a few years ago.

The first one is the one that's under threat. I have outstanding bounce back loan, supplier debts, hmrc debts, etc

The second one is OK, more profitable and working well. This one I'm looking at re locating to a rates free property.

1) is the second ltd company safe? From the first one.
2) is it best to re locate then seek a voluntary insolvency?
3) can there be any come back over similar business types? For example if my second business started selling simular products as the first later on.

Thanks
Jane

Hi Jane

1. Does the second one owe any debt to the first one? Has it acquired any assets from the first one?

2. If the two businesses are unrelated, I'm not sure why you would want to delay getting advice for the first one.

3. Not as far as insolvency goes, unless the second one uses the same or similar name as the first one, or owes money to the first one, or wants to acquire assets from the first one.

As regards tax law I would have to recommend you speak to the company's accountants.

FYI you might want to move your post to the insolvency section of the forum for more replies from other IP's.

 

[Frank Wessely]

Hi @Janemorley74

Do the two businesses have similar names? If so and you end up liquidating the first company, that could cause issues for you. Therefore seeking early advice is a good idea.

Thanks.