Going into liquidation... help!
Discussion
The company's earned no money since the start of 2003 so we're going to have to call it a day. Is there a good website to help me understand what's going to happen? And does anyone know of a way to hang onto the technology and equipment that I'll need to earn a living privately - or will the liquidators take the lot?
I've not posted this under my real Pistonheads name, but I don't really want to make this public just yet...
edited to correct crap spelling...
>>> Edited by BUSTED on Wednesday 9th April 07:30
I've not posted this under my real Pistonheads name, but I don't really want to make this public just yet...
edited to correct crap spelling...
>>> Edited by BUSTED on Wednesday 9th April 07:30
Do you have any debt? How many employees, or is it just you (& spouse)?
I don't know a great deal, other than due to being unemployed (as a one man ltd co) for a while, and then going overseas, I had to wind up my company last year.
This may not be of any help, but I guess more information would help people to respond. That may give your true identity away though
Sparks
I don't know a great deal, other than due to being unemployed (as a one man ltd co) for a while, and then going overseas, I had to wind up my company last year.
This may not be of any help, but I guess more information would help people to respond. That may give your true identity away though
Sparks
Sorry to hear about your business.
My man owns a large audio and lighting co and sold 30K NZD to a flash bar in central city. They heard through the grape vine that this bar was surely going under. Before it was made public and he got his strongest guys and broke in the premises to get the stock back as it wasnt paid for. Chances were he might not have got it back if other creditors couldn't be paid.
So from that point of view gaurd your stuff.
Hope you get back on your feet soon.
My man owns a large audio and lighting co and sold 30K NZD to a flash bar in central city. They heard through the grape vine that this bar was surely going under. Before it was made public and he got his strongest guys and broke in the premises to get the stock back as it wasnt paid for. Chances were he might not have got it back if other creditors couldn't be paid.
So from that point of view gaurd your stuff.
Hope you get back on your feet soon.
Busted
Sorry to hear about your situation, it hasn't personally happened to me but has to several people I know quite closely.
There is a defined pecking order for payout of assets, I think from memory it is:-
VAT
employees
taxman
creditors
shareholders/directors
I assume that you are a Ltd company (if you ae a sole trader or partnership, you may well personally be liable for the debts).
You need to appoint a receiver/liquidator (talk to your accountant), they will effectively cease the comapny trading, given your position. You can normally do some kind of 'deal' with them for some of the assets at fair value (or get a third party to do so on your behalf), they will rather sell to you at a known price then give the stuff away at a clearance/auction/liquidation sale. (They need to guarantee a certain amount of income to pay their fees!!). On that point if you have many items that your 'mates' may want you could do a single deal with the liquidator, as again he will want to sell a big lot of items because its less hassle.
I wouldn't worry about it too much, it happens to lots of people and the stigma that was once attached to it doesn't seem to be there these days.
(You could try selling some of the assets now to a third party, BUT you will have to sell them for at least a fair market value and not spend the monies received, otherwise questions may be asked)
Hope that helps
davidy
Sorry to hear about your situation, it hasn't personally happened to me but has to several people I know quite closely.
There is a defined pecking order for payout of assets, I think from memory it is:-
VAT
employees
taxman
creditors
shareholders/directors
I assume that you are a Ltd company (if you ae a sole trader or partnership, you may well personally be liable for the debts).
You need to appoint a receiver/liquidator (talk to your accountant), they will effectively cease the comapny trading, given your position. You can normally do some kind of 'deal' with them for some of the assets at fair value (or get a third party to do so on your behalf), they will rather sell to you at a known price then give the stuff away at a clearance/auction/liquidation sale. (They need to guarantee a certain amount of income to pay their fees!!). On that point if you have many items that your 'mates' may want you could do a single deal with the liquidator, as again he will want to sell a big lot of items because its less hassle.
I wouldn't worry about it too much, it happens to lots of people and the stigma that was once attached to it doesn't seem to be there these days.
(You could try selling some of the assets now to a third party, BUT you will have to sell them for at least a fair market value and not spend the monies received, otherwise questions may be asked)
Hope that helps
davidy
Are any of the company's assets "mortgaged" or "secured" to lenders (banks, HP/Leasing companies etc)in any way? If so, they become "Ranking Creditors" as well. If the company's liability's exceed the value of the assets, then these assets will have to be retained in the company in order that the creditors can be paid, particularly the "Ranking Creditors" - such as banks and other financial lenders, Inland Revenue, HM Customs & Excise etc. Transferring assets to the directors prior to a liquidation can be seen by the courts to be "treating the directors as preferrential creditors" and could be construed as being fraudulent, ie a criminal offence.
BUSTED said: Well, we owe the VAT and the taxman about £40k and suppliers about £15k and don't have the assets to cover it. No staff are on the payroll - all work freelance
Sorry to hear that. It looks like davidy has it covered. Get some professional advice. You will have to sell any company assets to contribute to the debt payment, although (as davidy says) you could sell them to yourself (accountant can give you their value).
Good luck
Sparks
kylie said: Sorry to hear about your business.
My man owns a large audio and lighting co and sold 30K NZD to a flash bar in central city. They heard through the grape vine that this bar was surely going under. Before it was made public and he got his strongest guys and broke in the premises to get the stock back as it wasnt paid for. Chances were he might not have got it back if other creditors couldn't be paid.
So from that point of view gaurd your stuff.
Hope you get back on your feet soon.
In this sort of scenario you need to have your Ts&Cs specify that title in the goods is retained until payment, i.e. they still belong to you, so receivers/creditors have no call on the goods.
davidy said:
There is a defined pecking order for payout of assets, I think from memory it is:-
VAT
employees
taxman
creditors
shareholders/directors
davidy
AFAIK employees come along with creditors because they are creditors as well.
Customs and Excise and Inland Revenue first
Secured Creditors second (banks etc.)
Unsecured creditors (and employees) third
Shareholders last
Had friend in similar situation once. Point to watch...
It has been suggested that you should sell assets asap. Watch out that you are DEFINITELY solvent when you sell them as trading when insolvent gets you into all sorts of problems. Take advice.
Goes without saying that you should only sell assets that your company owns anyway.
It has been suggested that you should sell assets asap. Watch out that you are DEFINITELY solvent when you sell them as trading when insolvent gets you into all sorts of problems. Take advice.
Goes without saying that you should only sell assets that your company owns anyway.
Talk to an insolvency practitioner for some advice. You may be able to keep working and keep the equipment if you can convince them that you will be able to pay monies each month to your creditors. You may be able to enter into an IVA which is basically a voluntary agreement acceptable to the creditors. You may be able to offer security.
There is compulsary and voluntary liquidation, so who is trying to in effect make you pay them. Get them off your back if you can and you may be able to negotiate to pay less. Check your accounts, have you overpaid tax or vat? At the end of the day it is you who knows if you can make a profit. If you can't then try to get it over quickly and cleanly because you will get hammered with the liquidator's legal costs which will be at the 'full whack'.
Decide early on if you want to engage a solicitor and if you do make 100 per cent sure you choose one with insolvency experience.
There is compulsary and voluntary liquidation, so who is trying to in effect make you pay them. Get them off your back if you can and you may be able to negotiate to pay less. Check your accounts, have you overpaid tax or vat? At the end of the day it is you who knows if you can make a profit. If you can't then try to get it over quickly and cleanly because you will get hammered with the liquidator's legal costs which will be at the 'full whack'.
Decide early on if you want to engage a solicitor and if you do make 100 per cent sure you choose one with insolvency experience.
Speak to an Insolvency practitioner ("IP") as already suggested. You may want to do a Company Voluntary Arrangement or put the company into liquidation, either way he/she can advise you on your best course of action and legal responsibilities.
My experience is that good IP's don't normally charge for the Initial consultation.
As far as the business assets are concerned an IP can point you in the right direction of a valuer and you can come to a deal whereby either you personally or a new company can buy the assets at the market price.
DAZ
(Used to work for an IP in the distant past)
(Edited to say email me if you have any specific queries or want to make telephone contact)
>> Edited by dazren on Wednesday 9th April 14:34
My experience is that good IP's don't normally charge for the Initial consultation.
As far as the business assets are concerned an IP can point you in the right direction of a valuer and you can come to a deal whereby either you personally or a new company can buy the assets at the market price.
DAZ
(Used to work for an IP in the distant past)
(Edited to say email me if you have any specific queries or want to make telephone contact)
>> Edited by dazren on Wednesday 9th April 14:34
Surely you've missed the one that goes at the top of the list? The liquidator.
kevinday said:
davidy said:
There is a defined pecking order for payout of assets, I think from memory it is:-
VAT
employees
taxman
creditors
shareholders/directors
davidy
AFAIK employees come along with creditors because they are creditors as well.
Customs and Excise and Inland Revenue first
Secured Creditors second (banks etc.)
Unsecured creditors (and employees) third
Shareholders last
. I don't know much about this but don't they always get paid? 
Really sorry to hear of your problems.
If you have a good accountant who you have a decent rapport with, then talk to him/her. If anyone can help you at all with your problems, they should be able too especially as they will know your business.
Hope you're able to salvage something from all of this.
If you have a good accountant who you have a decent rapport with, then talk to him/her. If anyone can help you at all with your problems, they should be able too especially as they will know your business.
Hope you're able to salvage something from all of this.
Take a look at the website of the Bankcruptcy Association, I've read one of their guides for people in this position and the advice they give is very useful and very practical. It is not written from a lawyers standpoint but from the perspective of someone who has been there and done it. They have a telephone helpline and can provide support and advice.
Even if you think your own assets are secure (have you given a personal guarantee to your bank or a creditor?) they can guide you through the whole mire.
Take a look and ring them.
Good luck.
www.theba.org.uk/
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