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Can I close company with HSBC overdraft

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Hello. I know there was some other articles about this but a lot of them were quite old. Situation of mine is like this.

In 2016 I opened a LTD company with intention to provide videography services using professional grade drones. It was my passion and hobby and I had some offers and even Sheffield Star coverage, so decided to open business for that purpose. I took HSBC account with allowed overdraft of £5000, as well I even sold my personal vehicle to get funds, which I used to get UAV pilots license(£1800) , liability insurance(£780 a year) and equipment (Drone, video editing equipment etc which alone was around £3600). Surprisingly, despite my efforts, google ads, and trying to push by personally visiting construction and real estate companies to leave my card or a leaflets, I never had a single order. Company hasn't traded at all and it was nothing but a complete loss. Combined with my then health issues and depression, eventually overdraft fees were forcing me to sell out the equipment one by one, so account would not get out of arranged overdraft limits (£5000). Now 4 years in I still try to keep account afloat from my wage, but because of that I can barely get by from paycheck till paycheck. Was hoping that, as someone said "if you will do something you love, you wont have work a day in your life again". Welp, it did not work out. Now I got this £4800 overdraft and limited company, which I was filing every year as dormant using tools on companies house website. Is there any way for me to strike down the company and perhaps the overdraft as well, because this is really getting on my health already and I dont want to do anything rash.

Any advice would be appreciated

Thanks

Replies (47)

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By Anonymous.
16th Oct 2020 18:03

Certainly looks like you have been doing your own accounts.

The accounts for Umage Limited show no sign of any bank overdraft.

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Replying to Anonymous.:
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By Paul Crowley
16th Oct 2020 18:07

And is it 2 Shares or 800?
Who knows

That's why DIY does not work

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By Paul Crowley
16th Oct 2020 18:03

Stop filing anything at companies house
If you asked in July I would have said do not file Confirmation statement,
Need to wait another year now for Companies House to strike off due to non filing.

You will have given a personal guarantee on the overdraft so HSBC have the option to require you to pay even if the company is struck off

Next time do not start company
Be self employed.
If does not work then there is tax relief
If it does work incorporate the successful business

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Replying to Paul Crowley:
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By egasso
16th Oct 2020 18:24

Last time I did not file anything they gave me £150 charge due to being less than a week late... That was last year. Well I suppose I did not run things properly, but I was not able to afford the accountant so I was filing it according to articles I found online and asking one of friends who was quite successful businessman. But yeah, it seems it was not best. I will accept the beating now, my mistake, sorry bout that... It seems there will be no way out of this... not so cool

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Replying to egasso:
RLI
By lionofludesch
16th Oct 2020 18:36

egasso wrote:

Last time I did not file anything they gave me £150 charge due to being less than a week late...

You didn't file anything but you were a week late ?

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Replying to lionofludesch:
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By egasso
16th Oct 2020 18:41

Sorry it was comment with a pinch of sarcasm, what I meant to say was that I was late and got fined, with advice of not filing at all, I have a feeling that it may end up worse

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Replying to egasso:
RLI
By lionofludesch
16th Oct 2020 18:42

egasso wrote:

Last time I did not file anything they gave me £150 charge due to being less than a week late... That was last year. Well I suppose I did not run things properly, but I was not able to afford the accountant so I was filing it according to articles I found online and asking one of friends who was quite successful businessman. But yeah, it seems it was not best. I will accept the beating now, my mistake, sorry bout that... It seems there will be no way out of this... not so cool

Looking at your filings, you seemed to have claimed you're dormant - that means there are no transactions - yet you claim to have borrowed money from HSBC. Whether deliberately or not, you've filed information that is (let's not dress this up) little short of a pack of lies. For heaven's sake, know your limits !

Turning to closure of the company, if you've a personal guarantee with HSBC, they won't object to striking off your company. But they'll come to you for the money.

If there's no personal guarantee, I would expect them to object and you may be stuck with a creditors liquidation.

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Replying to lionofludesch:
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By egasso
16th Oct 2020 18:54

Not going to argue with that, I was opening company with my dad, and quite frankly, did not know what I was doing. I did not know that assets has to be recorded, did not know that overdraft has to be recorded. And now will have to pay the price. At least I got some clarity now. I suppose what left for me is to strike company down, close account, perhaps arrange some kind repayment plan and just pay back what I owe, I do not look for shortcuts, just this honestly was wearing me out. Doing something here, like asking a questions at least going to give me some closure. It is just a bit upsetting that I tried, I tried wrong, and since I did not had/couldnt afford professional help - done lotta mistakes along...

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Replying to egasso:
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By lionofludesch
16th Oct 2020 19:21

egasso wrote:

It is just a bit upsetting that I tried, I tried wrong, and since I did not had/couldnt afford professional help ....

You probably couldn't afford to be without it.

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Replying to lionofludesch:
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By MidlandsBusinessRecovery
18th Oct 2020 09:54

This is exactly why people who are not insolvency practitioners should not be giving advice out here or anywhere on insolvency ... 'you may be stuck with a creditors liquidation'. Completely wrong. OP, please ignore lionofludesch's post.

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Replying to MidlandsBusinessRecovery:
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By lionofludesch
18th Oct 2020 10:03

MidlandsBusinessRecovery wrote:
OP, please ignore lionofludesch's post.

Feel free to do so.

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Replying to MidlandsBusinessRecovery:
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By Paul Crowley
18th Oct 2020 14:14

Why is this wrong?
Creditor objects, company not struck off.
Up to creditor what creditor does.
Net result could be OP banned from being a company director.

Unlikely?

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Replying to Paul Crowley:
RLI
By lionofludesch
18th Oct 2020 16:08

Paul Crowley wrote:

Why is this wrong?

Unlikely?

I agree it's unlikely but on the other hand it's definitely "may be".

I never said it was definitely definite.

I wasn't willing to take the point further but thanks for pointing out the obvious.

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Replying to lionofludesch:
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By MidlandsBusinessRecovery
18th Oct 2020 19:21

Isn't one of our jobs as accountants to assess various risks for clients? What is 'unlikely'? Put a percentage chance on it... 49%? 20%? 10%? 1%? Less than 1%?
Taking into account the fact there are hundreds of thousands of companies out there right now, far more than normal times, in such a position - Does the government have the resources and will to pull this guy up?
And then isn't our role to point out the consequences?... And the options to deal with the situation?
And best advise people? Pointing out things that we know that others don't... like there's nothing anywhere in the law that says a director or shareholder has to spend their own money to put their company into liquidation -hence my comment about the poster who suggested a CVL was a possibility - a ridiculous suggestion. I can imagine that poster advising his clients to spend £5k on an unnecessary CVL, advising on stuff he / she knows nothing about yet pretends to be a learned, experienced professional.

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Replying to MidlandsBusinessRecovery:
RLI
By lionofludesch
18th Oct 2020 19:57

MidlandsBusinessRecovery wrote:

Isn't one of our jobs as accountants to assess various risks for clients? What is 'unlikely'? Put a percentage chance on it... 49%? 20%? 10%? 1%? Less than 1%?
Taking into account the fact there are hundreds of thousands of companies out there right now, far more than normal times, in such a position - Does the government have the resources and will to pull this guy up?
And then isn't our role to point out the consequences?... And the options to deal with the situation?
And best advise people? Pointing out things that we know that others don't... like there's nothing anywhere in the law that says a director or shareholder has to spend their own money to put their company into liquidation -hence my comment about the poster who suggested a CVL was a possibility - a ridiculous suggestion. I can imagine that poster advising his clients to spend £5k on an unnecessary CVL, advising on stuff he / she knows nothing about yet pretends to be a learned, experienced professional.

Up to the creditors to start a CVL, not the shareholders.

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Replying to lionofludesch:
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By MidlandsBusinessRecovery
18th Oct 2020 21:11

You do not know what you're talking about.
You say 'Up to the creditors to start a CVL, not the shareholders.'
No, it's not. Creditors start a COMPULSORY LIQUIDATION by petitioning the court, asking it to make a winding up order.
A CREDITORS VOLUNTARY LIQUIDATION is started off by the directors who call a meeting of the shareholders in order to pass resolutions to put the company into liquidation and appoint a liquidator. A CVL is a process where the creditors only get a say after the company is in liquidation, the creditors do NOT start it off.

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Replying to MidlandsBusinessRecovery:
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By lionofludesch
18th Oct 2020 22:27

Thanks for educating me.

Now - where did I suggest that the OP instigate a CVL ?

Not that the OP had any such intention.

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Replying to lionofludesch:
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By Paul Crowley
18th Oct 2020 22:45

"Replying to lionofludesch:
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By MidlandsBusinessRecovery
18th Oct 2020 19:21

comment about the poster who suggested a CVL was a possibility - a ridiculous suggestion. I can imagine that poster advising his clients to spend £5k on an unnecessary CVL, advising on stuff he / she knows nothing about yet pretends to be a learned, experienced professional."

These are the first references to CVL. Easy to make a simple mistake when having a rant

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Replying to egasso:
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By Paul Crowley
16th Oct 2020 18:59

12 Days late
You could have filed 9 Months earlier
Why wait so long?

They fined you for Submitting late accounts
NO FILE MEANS NO FINE

Pretty much all accountants work on first meeting free
The problem needs to be addressed not left to fester. You and your business friend really do not understand the way things work sufficiently.

Take advice and make a decision and stick to it

Do not leave this another 4 years

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By Bobbo
16th Oct 2020 19:05

Even the incorporation documents are an absolute state. Impressive.

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By Anonymous.
16th Oct 2020 21:17

You say "Company hasn't traded at all" and none of the transactions described [AV pilots license(£1800) , liability insurance(£780 a year) and equipment (Drone, video editing equipment etc which alone was around £3600)] appear in the accounts of your company.

Are you sure the company borrowed the money and not you personally?

As others have said, presumably a moot point as I can't imagine HSBC lent a newly formed dormant company £5,000 without a personal guarantee.

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Replying to Anonymous.:
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By Paul Crowley
16th Oct 2020 21:24

The £800 and £700 share capital also omitted

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Replying to Paul Crowley:
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By Anonymous.
16th Oct 2020 22:04

Paul Crowley wrote:

The £800 and £700 share capital also omitted

Indeed!

At the risk of me being helpful (and subject to IT SA deadlines, etc., etc.) the OP might have best argued that he was self-employed (assuming he had other income to absorb losses).

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By Matrix
17th Oct 2020 06:22

I don’t know, why don’t you speak to the bank or try and close it and see what happens? If you file DS01 you need to write to all the creditors first I think.

I am less concerned about your filings than the other contributors. If the company never traded then no tax due so rubbish filed at Companies House is of no interest to HMRC. Your bank may, of course, have a different view.

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Replying to Matrix:
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By MidlandsBusinessRecovery
18th Oct 2020 12:06

Matrix, yours is by far the most helpful and professional comment here, one that if I were a member of the public desperate for help coming to a site inhabited by professionals, I'd appreciate far more than the others.
Yes, my advice as an IP is to do what you've said. Spot on.

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Replying to MidlandsBusinessRecovery:
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By Paul Crowley
18th Oct 2020 14:05

So your advice is: do what the accountant has already advised yesterday.

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Replying to Paul Crowley:
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By MidlandsBusinessRecovery
18th Oct 2020 19:21

Yes

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blue sheep
By NH
17th Oct 2020 09:48

Dont worry about past mistakes, no one cares about the filings apart from a few people on here, the UK system allows DIY accounting so no one can blame you for giving it a go even if you have messed it up.
Your problem is the bank if you have a personal guarantee, speak to them and they might be willing to accept a proposal

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Replying to NH:
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By egasso
17th Oct 2020 10:26

Thank you! I think that what I will try, but boy! Some guys here are brutal. I know I messed up and possibly did not deserve people to sugarcoat their words just to make me feel better. But im still young, it was my very first attempt at business and obviously I failed miserably. Your answer makes me feel a bit better. Whats done is done, im not sure if others just been having fun bringing all that stuff up, and that was a bit brutal. Anyway, i will see what I can do, gotta resolve it and not leave for another 4 years as one of helpers here said. Thanks for yours and everyones answers, i think i got it now

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Replying to egasso:
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By Sarah Z
17th Oct 2020 15:21

People are brutal because this is a forum for accountants, not for people like yourself to come and get free advice

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Replying to egasso:
RLI
By lionofludesch
17th Oct 2020 15:37

egasso wrote:
.... im not sure if others just been having fun bringing all that stuff up, and that was a bit brutal.

We earn a living from accountancy.

Just like you earn one from flying drones.

Yeah, we do get a bit tetchy when DIY accountants find out it's not as easy as they thought and come to us looking to bail them out for free.

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Replying to egasso:
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By MidlandsBusinessRecovery
18th Oct 2020 09:41

'Some guys here are brutal' - yes they tend to work very much like a pack of wolves, and have all the finesse of one. They think they are somehow better than others because they are experts in one small topic, that of accountancy. You are not the first, and you will certainly not be the last, member of the public who comes on this site looking for help who gets torn to shreds. It's about time the site administrator taught them some manners, applied some proper standards as every time a member of the public comes here and gets slated, the site's reputation goes down.

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Replying to MidlandsBusinessRecovery:
RLI
By lionofludesch
18th Oct 2020 09:58

MidlandsBusinessRecovery wrote:

'Some guys here are brutal' - yes they tend to work very much like a pack of wolves, and have all the finesse of one. They think they are somehow better than others because they are experts in one small topic, that of accountancy.

Ah yes - you were the one who needed a lawyer but still asked some accountants.

You were told several times that it was a legal matter yet you still persisted.

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Replying to MidlandsBusinessRecovery:
Psycho
By Wilson Philips
18th Oct 2020 13:41

There’s some truth in what you say. It is equally true that the administrators need to deal with those non-accountants who come on here looking for free advice, from those that normally charge for their services, and then throw their toys out of the pram when they don’t get the answer that they were hoping for.

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Replying to MidlandsBusinessRecovery:
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By Youareatit
18th Oct 2020 11:11

MidlandsBusinessRecovery wrote:

'Some guys here are brutal' - yes they tend to work very much like a pack of wolves, and have all the finesse of one. They think they are somehow better than others because they are experts in one small topic, that of accountancy. You are not the first, and you will certainly not be the last, member of the public who comes on this site looking for help who gets torn to shreds. It's about time the site administrator taught them some manners, applied some proper standards as every time a member of the public comes here and gets slated, the site's reputation goes down.

Will you ever stop whingeing and actually answer a poster? A member since 2012 and never helps anyone!

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Replying to Youareatit:
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By MidlandsBusinessRecovery
18th Oct 2020 12:12

So pointing out to a member of the public who's been torn to shreds by a professional that I disagree with how he's been treated by them is 'whingeing', is it?

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Replying to MidlandsBusinessRecovery:
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By Youareatit
18th Oct 2020 12:17

All of your posts have been whiney. You are in it just to make a point by slagging off the posters who help out people. But then you try to make out you are holier than thou.

This OP got some factual hard thruths, plus some assistance. Hopefully he will not make the same mistake again.

Now whine as much as you like, you clearly enjoy it. But then why not actually help this poster out as well, especially given this is supposed to be your area of expertise?

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Replying to Youareatit:
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By MidlandsBusinessRecovery
18th Oct 2020 12:32

If you care to have a look at my post in response to Matrix's, you will see that I did in fact help, so perhaps you should read everything and properly before you pass judgment?

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Replying to MidlandsBusinessRecovery:
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By Youareatit
18th Oct 2020 13:25

MidlandsBusinessRecovery wrote:

If you care to have a look at my post in response to Matrix's, you will see that I did in fact help, so perhaps you should read everything and properly before you pass judgment?

Get a grip man.

I challenged you at 11.11 today, you only posted a response at 12.06 today in answer to Matrix. Response was complimentary to Matrix but also rather condescending. with your little pat on the head!

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Replying to Youareatit:
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By Paul Crowley
18th Oct 2020 15:41

Thanks
I had missed the 1 hour delay in 'helping'
Agreement really with the profession that he so clearly despises based on all postings from 2012 (the year, not the time)
Not a long search, and so few threads.

Odd really as this is the one he could have been first to help by suggesting a PM

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Replying to MidlandsBusinessRecovery:
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By Paul Crowley
18th Oct 2020 14:03

What exactly did you add?

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Replying to MidlandsBusinessRecovery:
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By Paul Crowley
18th Oct 2020 14:03

What exactly did you add?

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Replying to Paul Crowley:
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By AWeb72
18th Oct 2020 19:16

Nothing besides a lofty attitude

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Replying to MidlandsBusinessRecovery:
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By AWeb72
18th Oct 2020 16:40

People are [***] off because this forum was once just for accountants to bounce off each other.

Now it's a free for all. And the site's reputation went to the bottom of the gutter LONG ago.

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By bernard michael
19th Oct 2020 10:07

Ladies stop the handbagging. The OP has accepted the answers so why is the thread continuing??

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Lisa Thomas
By Insolvency Practitioner
19th Oct 2020 12:17

I haven't read all the replies so apologies if I am repeating something.

Options seem to be:

1. Dissolve the Company yourself - see here for details on how to do this.

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

Note that HMRC are likely to object and if you have given a personal guarantee to the Bank then you will still have to deal with this personally.

2. If you do not file returns with Companies House they will eventually strike it off. Creditors can object and they could petition to put the Company into Compulsory Liquidation via the Court, although this will be expensive for them and an unusual commercial decision where it appears they will not get any cost and/or dividend on their debt back.

3. Liquidate the Company yourself via Court. This will costs c£3-4k in court legal fees and VAT. Funds will need to be found up front to pay.

4. Liquidate the Company yourself via Creditors Voluntary liquidation ("CVL") This will likely costs c£5k but you might be able to pay the costs in instalments over time.

Options 3. and 4. do not appear to be worthwhile in the circumstances you have laid out.

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Tallula Brogan
By Tallula Brogan
19th Oct 2020 12:19

Hello all,
The AWEB moderating team has made the decision to close the comments on this thread. Please try to keep all discussion professional and respectful in the forum. Thanks :)

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