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Can you liquidate an unregisteted club

A tenant with a lease on a social club ended their tenancy

The club was not a registered business & produced no accounts.

They have debts in excess of £70k & the trustees are trying to go insolvent or trying to liquidate " the club".

The owners/ landlandlord has sold the proper that was vacated by the tenant in June 2018.

How can they do this.

 

 

 

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23rd Feb 2019 18:02

From your information I assume that the club was an unincorporated association.

In this situation the liabilities of the club are the liability of the members. Creditors are likely to approach members of the committee first.

If no accounts were prepared was there a functioning committee? Was bookkeeping being done? Payroll? Subscriptions collected? Is there a final list of members?

Who do they owe the £70,000 to? From my experience it may be
a brewery loan
unpaid expenses eg utilities, salaries
loans from members eg to keep the club afloat or to pay for fixed assets.

What is the likelihood that the creditors will chase payment? For a brewery loan see if you can find a copy of the agreement.

From the information that I have read, an unincorporated association cannot walk away from its liabilities. However actually collecting payment may be difficult. For example how would a creditor prove a particular person was a member of the club?

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23rd Feb 2019 18:36

The lease was actually in the name of an organisation with the trustees & secretary running the "club".

I dont believe there was ever any formal agreement to do this separately.

Wouldn"t the actual leaseholders be liable for the debts.

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23rd Feb 2019 18:52

What are the debts? Unpaid rent: then the landlord might pursue the trustees and secretary.

If there was no agreement, then was it a club with members, or was it a business that was called a club? Were subscriptions paid?

You need more information on how the club was being run. Does it seem like a business or a club run by a committee on behalf of members?

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to Jane Evans
24th Feb 2019 10:21

Whether it is a business or a club I would think it would still be an unincorporated association unless it is actually incorporated with limited liability. Hence the committee would need to be particularly careful about how they deal with this as if there are any costs incurred as part of the process they may also have to pay those.

The word "trustees" would, however, imply that somewhere there is a trust.

I have in the past dealt with members clubs that were licenced premises which more recently were unprofitable, but for many years built up assets when they made large surpluses. They tended to not face the reality that things were going bad and that made things worse.

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25th Feb 2019 09:13

Yes the unincorporated 'Company' can be Liquidated, and should be if it is insolvent.

Are you a creditor, or a Trustee?

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