Just going through a Ltd Co set of of accounts and have come across the following problem.
Co A's (development Co) BS show a property @ 88k and a mortgage of 65k.
All the relevant documents show that the property and mortgage do not belong to Co A, but Co B (construction Co).
Of information obtained from the Director, it appears that when the original purchase was made, Co A was the intended owner but funding would only be granted if taken in the name of Co B.
To remove it from the BS would leave Co B as a debtor for 23k. This 23k increase is due to payments made to Co B for renovation etc on the rental property.
No interest charges or rental income had been processed through Co B?
Director was involved with Co B, however this Co went into liquidation several years ago and the IP's were not interested in selling the property due to negative equity.
So do I just leave it as a long term Debtor and thus correct the property side of the BS?
It would be handy to write the debt off, but I can not see that being a possible.
Any thoughts.
Replies (5)
Please login or register to join the discussion.
If Co B no longer exists
Then presumably the property belongs to the Crown now?
I can't answer your question, but how will the property ever be sold if the owner no longer exists?
Good luck!
Wht about the mortgagee?
Surely they would have exercised their charge and forced the sale on liquidation of B presumably they are accepting mortgage repayments from A?
Sounds like proper legal advice needed!
What did IP do?
I don't understand why the IP were "not interested in selling the property due to negative equity". Even if that was the case, selling the property would have released some funds to pay the creditor at least in part, which I thought was the IP's job in a liquidation.
What did they charge for the liquidation?