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DLA- company owes me & shareholder money

Unable to repay loan from director - prior dissolution

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Hi all, 
I’m currently closing down my company. I’m the director & shareholder. There’s also another shareholder in the company. We both contributed the startup capital for the company recorded on DLA. No contract. Based on the estimated value of all assets & cash, it would be impossible to repay the loan of director & shareholder. There’s no other liabilities. Questions are; how do I close the account with the outstanding liabilities (loans & my unpaid PAYE wages of the final month of trading)? And how do I document it? Are we director/shareholder liable for the debt (although we are the creditors)? Can another shareholder refuse the terms if we ought to have things in writing? We were only a small non profitable business to afford an IP. Many many thanks in advance. 

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Lisa Thomas
By Insolvency Practitioner
30th Jun 2020 11:02

If you are writing the debt off, what would the other Shareholder be objecting to?

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Replying to Insolvency Practitioner:
By johngroganjga
30th Jun 2020 11:14

He didn’t say he was writing off (i.e. waiving) the debt - only that the company was insolvent and unable to pay it in full.

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By johngroganjga
30th Jun 2020 11:16

If you and the other shareholder’s loans are really the only creditors, just use the cash available to repay them as far as possible - the same amount in the £ as each other, unless you agree otherwise. Then strike the company off. That is all.

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By ireallyshouldknowthisbut
30th Jun 2020 11:24

As john says, just work out what cash you have and then work out how to split the pot. I imagine there will be some arguments about who gets what, but you can stop them with a "well cough up £3-5k for a liquidator then" and you have a much smaller pot to argue over.

Id call a meeting, work out what you have in the pot, debate how its split and hopefully a the point where you both feel mildly ripped off and that the other side has got a slightly better deal than, but its good enough to sign off on you have a deal.

Document as you normally document decisions, sign it off, split off the cash, write off the debt and file a DS01, and done.

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Replying to ireallyshouldknowthisbut:
By johngroganjga
30th Jun 2020 11:35

Hopefully there won't be too much of an argument about the split. On a liquidation, each creditor would get the same amount in the £. That should focus the mind of the one who would prefer more than their pro rata share of the pot.

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By bernard michael
01st Jul 2020 09:30

Although you say there are no other liabilities have you/will you pay the P AYE ??

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Replying to bernard michael:
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By Shareholders1010
02nd Jul 2020 23:30

Yes. First one to be settled.

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