Is this legal?

[Tyre Smoke]

Last night I had one of those 'awake in the middle of the night' thoughts.

I would like to clarify, I have no intention of doing this.

Scenario...

I am Tyre Smoke t/a ABCD, a sole trader and have an overdraft facility of £10k and last year took out a BBL for £50k. All is going well, but I don't fancy paying back the loan or overdraft, indeed, I fancy another BBL before that ship has sailed.

So, can I cease trading as ABCD and start a new business as WXYZ Ltd (note now a Ltd Co) and continue what ABCD was doing and take out a new BBL?

Am I still liable for the debt of ABCD? I'm assuming so, because as a sole trader I am ABCD and vice versa.

[B9]

Aren't BBL only available to business which existed prior to the pandemic?

Else everyone would just setup a business, get a BBL, then cease trading..

[Countdown]

Tyre Smoke said:

Am I still liable for the debt of ABCD? I'm assuming so, because as a sole trader I am ABCD and vice versa.

Yup

If only ABCD had been ABCD Ltd, you could have spunked up the BBL/CBILS, closed up and walked away. it would have been even easier if ABCD Ltd was a PSC with little in the way of assets that couldnt be easily disposed of pre-Insolvency.

[JeffreyD]

A business applying for a loan needs to have been in existence by 1st March 2020

[Eric Mc]

The first loan was taken out to support your sole trader activity and therefore is in your name.

The fact that you might eventually close the sole trader business and start a new business under a limited company does not change the fact that you, personally, will still be liable for that original loan.

[Tyre Smoke]

Thought as much.

See what happens with random thoughts in the middle of the night.