Voluntary insolvency

Discussion in 'Insolvency' started by LizziB, May 17, 2020.

  1. LizziB

    LizziB UKBF Newcomer Free Member

    4 0
    I am looking down the barrel of insolvency, (words that had never entered my vocabulary 4 months ago). I run a limited company the 2 directors are myself and and my husband.
    I have debt of £5,000 to start up loans and my husband is owed money as director of £30,000 which were set up costs and and money he has put in when cash flow has been tight.
    I have received a grant from the government which pays my fixed costs but which very soon will have run out.
    What are my options?
    Lease on the property is with the council and up for renewal next year.

    How do I go about
     
    Posted: May 17, 2020 By: LizziB Member since: May 17, 2020
    #1
  2. Gavin Bates

    Gavin Bates UKBF Enthusiast Free Member

    664 133
    Hi

    I think the first thing you need to do is check your lease to make sure you haven’t given a personal guarantee.

    regards

    Gavin
     
    Posted: May 17, 2020 By: Gavin Bates Member since: May 9, 2016
    #2
  3. Porky

    Porky UKBF Regular Full Member

    162 63
    Hi Lizzie,

    As Gavin posted check for PGs, if your loan is from startuploans despite no actual guarantee against your property check the terms in case you are still liable.

    No issue in closing the Ltd company following the sponge bob method but it sounds like the only liability is directors loan which your husband won’t get back.

    Might be better to cease trading, moth ball and keep the Ltd company going, chat to your accountant? You might be able to use it for some other venture in which case ultimately getting your husbands £30k back. If you put the business effectively into administration it will eventually get struck off and the £30k written off yet you might still be on for the start up loan debt

    I would have initial free chat with an IP and see what they advise?
     
    Posted: May 17, 2020 By: Porky Member since: Dec 27, 2019
    #3
  4. LizziB

    LizziB UKBF Newcomer Free Member

    4 0
    Thank you for your replies. I forgot to mention my husband is not on any payroll or receive any dividends, in effect a silent Director. Does this make any difference to the above advice? Thanks
     
    Posted: May 17, 2020 By: LizziB Member since: May 17, 2020
    #4
  5. Scalloway

    Scalloway UKBF Legend Free Member

    16,034 3,386
    I don't think it makes any difference at all.
     
    Posted: May 17, 2020 By: Scalloway Member since: Jun 6, 2010
    #5
  6. Porky

    Porky UKBF Regular Full Member

    162 63
    Doesn’t matter what director he is as long as he is registered as director at companies house, check “people tab” against your company name:-

    https://beta.companieshouse.gov.uk/
     
    Posted: May 17, 2020 By: Porky Member since: Dec 27, 2019
    #6
  7. KAC

    KAC UKBF Ace Free Member

    1,156 260
    Assuming this was a trading company, your husband would be entitled to relief on the irrecoverable loan under TCGA92/S253 . Unfortunately this only is available against future capital gains but would help if he had any
     
    Posted: May 17, 2020 By: KAC Member since: May 7, 2017
    #7
  8. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,486 436
    I presume there are no assets in the Company?

    Options are as porky suggested to sit tight and mothball the Company for potential later use, or dissolve it now - see here for details:

    https://www.gov.uk/strike-off-your-company-from-companies-register

    Alternatively you can liquidate the Company, either voluntarily or via Court.

    There will be a cost to this which is normally paid for from the Company assets, or via the Directors personally.
     
    Posted: May 18, 2020 By: Lisa Thomas Member since: Apr 20, 2015
    #8