We acted for a property development company which went underwater in 2009 when RBS suddenly withdrew all funding and put in a receiver on the property site which they had as security. The receiver transferred the property to another RBS company and has now resigned leaving the remaining company which owes the two shareholder directors around £500,000 , some corporation tax (late filing penalties) Companies House (late filing penalties) and Business Rates from the point the bank withdrew all funding.
The problem is the company has no assets and no chance of ever having any assets. Therefore there is no money to pay a liquidator to wind it up properly. Understandably the directors do not wish to pay for more. They have wrtitten and advised all creditors of the situation and then applied to get it struck off at Companies House but HMRC have objected to this.
Any suggestions of how to get rid of it or is the company destined to float for ever in limbo collecting an increasing heap of late filing penalties?
Replies (9)
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I am not an expert in insolvency procedure but I would have thought this was one for the Official Receiver, and if I were you I would ring up their helpline and talk it through.
Pay the HMRC fines
HMRC are likely to continue to object as long as they think they are owed money. They have got a lot better at picking this up in recent years. As there is presumably no dispute over these (i.e. things were filed late) then you are likely to have trouble persuading HMRC to just let them go. This is the case, even if you demonstrate a lack of assets to pay these penalties from.
The directors may not wish to pay more, but if the corporation tax returns were filed late, this is presumably their fault. If HMRC are the only ones objecting, paying them off to allow the company to be struck off would seem to be the easiest solution. However, there is a big caveat to that. Only paying HMRC off is treating a creditor preferentially, which could rebound on them if the other creditors take issue with that.
It might also be worth taking legal advice over RBS' actions. If RBS suddenly withdrew funding with no good reason then you may have a case against them. Hard to tell from the facts posted if that is the case.
Dont pay the HMRC fines
HMRC will eventually withdraw their objection and it will go through. You could speed things up by writing to HMRC and pointing the situation out.
I understand that, even for companies in liquidation, Companies House do have a ten year timelimit on filing returns - ie, if after 10 years nothing has been filed, they will strike it off. That's a long time to wait however.
Why worry?
Just let the company sit.
Any creditors are those of the company not the directors. If the directors have failed in their duties to the company, then action can be taken against them only by the company or an administrator or liquidator of the company.
HMRC have powers to recover unpaid PAYE in relation to directors in narrowly defined circumstances.
Obviously if the directors have commited a criminal offence, there's a very different set of rules.
The directors are at liberty to resign their posts even if this leaves the company with no officers.
If the directors resign and no more documents are filed CH will strike it off after 3-6 months.
yep
resign the directors
Then complain to companies house there are no officers.
HMRC don't have a clue what to do next even if they did have a case.
One day HMRC and companies house will read and apply the legislation but don't hold your breath. Many will have to learn how to read first.
Another vote...
..for directors to resign. Also I agree mostly with 'The Black Knight' with his less flattering comments.