Winding-up Advice

[marscarsmaggie]

Need a bit of urgent advice please!
Our old company has ceased trading due to insolvency, we have followed some great advice from the members of this forum so far, but need a little more help.
Recieved a notice of winding-up from Companies House, but our ex-accoutant has wrote to them to oppose the closure as the old company owe him about £1700 but it has no money or assets.
We want to pay him off by a payment plan as he is a local supplier that could cause us a bit of grief, but obviously we would have to do this out of our own pockets or from our new company and it is the old company that owe him this money - what do we do?
We would like to get back to our ex-accoutant asap if we could agree anything, then hopefully the winding-up would go through in the next 3 months as we don't want it to drag-out any longer than necessary.
Any advice folks?

 

[Carsie]

From a legal point of you can’t be seen to be giving preferential treatment to a Creditor and therefore this is one for your morals not for the Accountants and I am not advocating walking away from responsibility, just being pragmatic.

I would ask -

1. Was your Accountant aware of your trading difficulties when you engaged him or during the latter period of them working with you?

The reason for the question is - they too are in business and they too take measured risk.

Do you feel they genuinely tried to help you or were they at “arms length?”

If they have objected to the winding up over £1700 then I would question if you will have the opportunity of an ongoing relationship

2. Does £1700 include VAT?

By the time you take VAT and the Accountants trading margin (say 50%) out of their bill then perhaps the cash loss to them is not that high and of course they can offset against their own trading profits.

You could offer a settlement on the basis of the above but I bet sure as eggs are eggs you New Co. accountant’s bill will be just that leeeeetle bit higher than needs to be

Unless they are genuinely really nice guys to work with I might be inclined to offer a, without prejudice payment post winding up and then move on to a new accountant.

HTH

 

[Carsie]

UKBF is having a slight technical hitch at the moment - duplicated post ... or maybe it's 'ol Carsie lol!

 

[David Griffiths]

I might be inclined to offer a, without prejudice payment post winding up and then move on to a new accountant.

HTH

The reasons for the insolvency haven't been established. If the old accountant is aware that the directors owe the company money because they have withdrawn funds that weren't theirs, such as illegal dividends - a frequent occurence - then he or she is perhaps unlikely to settle for less than full whack

 

[marscarsmaggie]

Thanks for your comments so far guys - a little bit more info which might help clear things up a bit.
Carsie:- We realise that we shouldn't give any preferential treatment to any our of creditors over any of the others, we are just trying to be 'right' with him, but the position we are in maybe we might have to let our morals take a back seat!
He did know that we were having trading difficulties during the later period of our trading, and he never offered any proper useful advice, just all purely by the book - no practical advice.
We don't want any further working relationship with him, but we were bothered that he might be able to cause us a bit of grief locally as we are running another business now.
Amount includes vat.
What do you think might be a reasonable offer post winding-up on our outstanding bill of £1700?
David:- We haven't took any illegal payments from the company it was just such an up-hill struggle from the start, and we realised in the end that we couldn't carry-on how we were going.

 

[Carsie]

What does your "belly" tell you Margaret? and what are you saying when you say he might cause you some problems?

If you have genuinely tried your hardest and you haven't been deceitful or dishonest then hold your head up high and walk down the high street knowing you tried your best when perhaps others didn't even try to do what you tried, it just didn't work out thats all.

There is no failure in trying, only in not trying.

If it really doesn't sit well with you then a "Dear John" letter might provide solace but if that was the case what about the other traders of various guises who were also caught up in the business' failure?

I would put the matter to rest in your head - apologise personally if need be and then move on.

 

[rubijoca]

In fact if the old company has no assets to pay off the creditors you should not carry debt to the new company! When creditors supplies services or goods to a company in fact they should keep an eye on their credit. The way some accountants look after clients sometimes is just about numbers and results, they even dont explain charts or simplify results in order to let the client understand at what point they really are in order to prevent further mistakes.

Dear Maggie you should carry on your liquidation as no assets are in the company so therefore they will not be able to get any moneys, it may delay now but it will happen, by the way, here it is the HMRC Manual of what you should do! Follow the instructions there: HMRC - ef6.pdf hope you can find it as i couldnt post the website.

 

[Spongebob]

Need a bit of urgent advice please!
Our old company has ceased trading due to insolvency, we have followed some great advice from the members of this forum so far, but need a little more help.
Recieved a notice of winding-up from Companies House, but our ex-accoutant has wrote to them to oppose the closure as the old company owe him about £1700 but it has no money or assets.
We want to pay him off by a payment plan as he is a local supplier that could cause us a bit of grief, but obviously we would have to do this out of our own pockets or from our new company and it is the old company that owe him this money - what do we do?
We would like to get back to our ex-accoutant asap if we could agree anything, then hopefully the winding-up would go through in the next 3 months as we don't want it to drag-out any longer than necessary.
Any advice folks?

Sorry to pedantic, but for the sake of other forum members reading this who may be in a similar situation I must correct some of your terminology in order to avoid confusion.

Winding Up is not a process initiated by Companies House. You have submitted the relevent application and received notice of Striking Off from Companies House. It is to this that your erstwhile accountant has objected.

Winding Up is another thing altogether. This is initiated by a creditor - usually HMRC - and results in the Official Receiver being appointed as liquidator of the company by the High Court.

If your accountant continues to object to the striking off then you will have to wait for HMRC to wind the company up (assuming they are owed money). This may take many months or even a year or so. This may sound daunting but in actual fact it isn't. Having an old company sitting in limbo having ceased trading need have no impact whatsoever on your lives and the operation of your new company. No-one can take any action against you personally or against your new company.

David raises a good point, however. Is your Directors Loan Account substantially overdrawn? Does you accountantant know of any 'buried bodies'?

If so they may cause problems for you with the Official Receiver as and when he is appointed to liquidate the company. An offer of say 50% of the outstanding balance in used twenties should keep him onside...

 

[Spongebob]

here it is the HMRC Manual of what you should do! Follow the instructions there: HMRC - ef6.pdf hope you can find it as i couldnt post the website.

http://www.hmrc.gov.uk/leaflets/c14.htm

 

[rubijoca]

Sorry to pedantic, but for the sake of other forum members reading this who may be in a similar situation I must correct some of your terminology in order to avoid confusion.

Winding Up is not a process initiated by Companies House. You have submitted the relevent application and received notice of Striking Off from Companies House. It is to this that your erstwhile accountant has objected.

Winding Up is another thing altogether. This is initiated by a creditor - usually HMRC - and results in the Official Receiver being appointed as liquidator of the company by the High Court.

If your accountant continues to object to the striking off then you will have to wait for HMRC to wind the company up (assuming they are owed money). This may take many months or even a year or so. This may sound daunting but in actual fact it isn't. Having an old company sitting in limbo having ceased trading need have no impact whatsoever on your lives and the operation of your new company. No-one can take any action against you personally or against your new company.

David raises a good point, however. Is your Directors Loan Account substantially overdrawn? Does you accountantant know of any 'buried bodies'?

If so they may cause problems for you with the Official Receiver as and when he is appointed to liquidate the company. An offer of say 50% of the outstanding balance in used twenties should keep him onside...

If there is a Directors Loan which hasnt been paid back to the company, the official receiver will be able to tack it down having a good look into all accounting's of the company!! And it will stop the company liquidation! So what to do?? It´s simple...you dnt have any other option apart from Personal Bankruptcy! Why? because you have taken a personal Loan on to the Ltd company, so you are liable to pay it off! If the LTd company goes and makes Loans without you being a guarantor your liquidation will go easy as you havent been a guarantor, but making loan giving yourself as a guarantor you will have to make the personal bankruptcy. This will take a bit of time to get discharged off and the banks will get you in a red list credit for years!

So... any dead bodies can be found anyway in last accounting years by the official receiver as this person has the duties job of go and search everything and in fact if its found a dead body buried, the accountant will be interviewed! It will not be good for his side as well! at the end of the day he is registered with the association or institute and it is his duty of informing the HMRC if he thinks one of his clients is committing some kind of fraud, if he fail to do so...he will not be in the good files as they can store companies files or practices etc...

Me personally, i do not recommend a director that has an old company in liquidation to open another company until one liquidation is finish. Limited companies can be closed by a government body in some grounds, some have licenses to comply, etc... it will look better appointing a new director. It is easy to do so, just download the form from HMRC and send it off to companies house.
I am more into payroll/Bookkeeping than insolvency so far, as i am doing Accounting's studies but i am 100% sure about the directors loan = if it is a lot of owed money the way out is personal bankruptcy!

About the official receiver and the accountant...well if i was the accountant and had to say something to the official receiver...i simply wouldn't say! By this time its too late, with all the accounting's of previous years in an official receiver hands an accountant has nothing to say! By law if a client is committing fraud, the accountant never informed the HMRC so he will be questioned by this!