Closing Limited Company

Closing Limited Company

Didn't find your answer?

Hi,

Can some please explain to me the procedure of cessation and if a client has VAT outstanding of £28000 and £3500 a guarantee bank loan, what will be the procedure? and what steps are involved 

The net assets are below 25000

Many thanks

Replies (10)

Please login or register to join the discussion.

By johngroganjga
06th Mar 2014 13:14

The first step in any business closure is to repay all the creditors.  When that has been done if, as you say, the remaining assets are under £25,000 distribute them to the shareholders and then apply to Companies House for the company to be struck off.

Thanks (0)
RLI
By lionofludesch
06th Mar 2014 13:21

More to it ?

John's answer is so obvious, I'm just wondering if the question needs clarifying.....

Thanks (0)
avatar
By Zam23
06th Mar 2014 13:43

Thanks for the answer if 28000 is overdue for VAT will HMRC allow it to be shut down

Thanks (0)
By johngroganjga
06th Mar 2014 13:47

Cart before horse

Not until it is paid. Once it is paid what happens to the company is none of their business.  As I said the first thing to do is repay the creditors. If you try and do it back to front it will not work.

Thanks (0)
avatar
By macaulay147
06th Mar 2014 14:09

Insolvent

John I think he means he has liabilities of £31,500 and assets of only £25,000. Not net assets after liabilities of £25,000.

So he is technically insolvent. If this is the case what assets is the bank loan gauranteed against?

 

Thanks (0)
Replying to johnjenkins:
avatar
By Zam23
06th Mar 2014 14:16

yes the bank loan is guaranteed personally by the director and unable to pay the large amount of vat, is this where an insolvency practitioner is needed?

 

Many thanks.

Thanks (0)
Replying to johnjenkins:
By johngroganjga
06th Mar 2014 14:22

Net assets

macaulay147 wrote:

John I think he means he has liabilities of £31,500 and assets of only £25,000. Not net assets after liabilities of £25,000.

Well he said "net assets" - but who knows what the reality is.  You may well be right.  I'm off as I have been wasting my time trying to help on the basis of false figures.

If the OP had said "what do we do with an insolvent company with a director who has guaranteed some of its debt" he would have got a very different answer.

Thanks (0)
avatar
By Zam23
06th Mar 2014 14:14

yes guaranteed against him personally,  is this where a insolvency practitioner is needed?

 

 

Thanks  

Thanks (0)
avatar
By Zam23
06th Mar 2014 14:24

apologies for the confusion

Thanks (0)
By GarethHughesFCCA
06th Mar 2014 19:08

.
Unless I've read this wrong, the company has creditors and no/little assets, in which case the Director should seek insolvency advice. Re the bank loan, the bank will approach the Director under his PG, and given the amounts involved, it should be quite easy to arrange a payment plan. Feel free to get in touch if you need help.

Thanks (0)