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Sale of Intellectual Property Rights Prior to Liquidation

Sale of Intellectual Property Rights Prior to...

My client is facing a £1500 pounds fine for non-submission of accounts (not my fault). It is loss-making and has intellectual property rights in two films produced and several screenplays. The sole UK director (the other has emigrated to Australia) wants to dissolve the company and assign the rights to a new company he controls before doing so in order to avoid paying the fine. I have told him that would be an illegal preference. Does anyone have any suggestions as to how he could safely transfer the rights to his new company?


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By Hansa
21st May 2012 15:53

Value & sequence of events

I can't see how preference comes into it.  Of more importance is the value assigned to those rights.  If an open-market value can be obtained (or reasonable guessed at and confirmed using a friendly local valuer), then I see no reason why the sale has to be arms length (although it always looks better).

The sequence of events should be

1. Obtain valuation

2. Make the sale (and ensure the proceeds are credited to the company) 

3. Notify all concerned the company has ceased to trade

4. distribute the funds held pro-rata (DLA & Penalties).

5. Close the bank account

6. Notify the Revenue that the company is insolvent and non-trading with the only creditors being themselves and the Director and that you propose to strike off the company.  They may accept "back of the envelope accounts" showing there are losses and close their file without objecting to the strike off. 

... worth a try even if it doesn't confirm with "current practice" 



Just noticed the OP's title mentions liquidation... does his mean there are other creditors?  If so the above will not be of any help beyond (1) & (2).  If there are no other creditors,this may save a couple of grand in liquidators fees.


Thanks (1)
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