Comments on: How To Close Down Your Limited Company http://link4business.info/2009/04/how-to-close-down-your-limited-company/ Your Business Link Portal: Starting, Growing, Running, Rescuing a Business (plus Gossip & Moans) Wed, 25 Aug 2010 23:08:53 +0100 hourly 1 http://wordpress.org/?v=3.0.1 By: christine collins http://link4business.info/2009/04/how-to-close-down-your-limited-company/comment-page-1/#comment-9878 christine collins Wed, 25 Aug 2010 23:08:53 +0000 http://link4business.info/?p=570#comment-9878 Hi, I would be grateful for some advice, as I am at my wits end. My son & I are directors of a small limited petfood company, which has been running for seven years. We are now some £6000 in debt to two companies. the bulk of this is to one supplierand the other in the form of bank overdraft. We want to close the company, but have no idea how to do this. I do not owe any VAT, and historically owe no other taxes. I am the only paid employee. The only asset is a van, for which the company has a loan, and I am sure that the amount owing exceeds the balance remaining on the vehicle. I would be grateful for any help you may be able to give. Hi, I would be grateful for some advice, as I am at my wits end. My son & I are directors of a small limited petfood company, which has been running for seven years.
We are now some £6000 in debt to two companies. the bulk of this is to one supplierand the other in the form of bank overdraft. We want to close the company, but have no idea how to do this.
I do not owe any VAT, and historically owe no other taxes. I am the only paid employee.
The only asset is a van, for which the company has a loan, and I am sure that the amount owing exceeds the balance remaining on the vehicle.
I would be grateful for any help you may be able to give.

]]> By: James http://link4business.info/2009/04/how-to-close-down-your-limited-company/comment-page-1/#comment-9833 James Tue, 24 Aug 2010 09:45:24 +0000 http://link4business.info/?p=570#comment-9833 Hi James, Wondering if you can give me some advice. My wife and I run a Ltd Company, we have 11 staff, and have some fairly high VAT/NI debts, as well as some moderately small supplier debts. We have made an arrangement with the Tax man to repay over the next 12 months and have made the first payment. Since last month we have had some issues with a couple of clients and it looks as though our revenue will now decrease. We still have a viable business and dont want to close but think almost certainly we wont be able to maintain our payments. If all was going well I would like to offer to one of our members of staff a small amount of equity in the company. However with the potential problems looming its not a good time to do so. Where do I stand with closing this company and starting up another one (potentially with the member of staff as a shareholder/director). Can we close down and leave our debts behind, and re-open in the same market place but with completely new name etc? In so doing we could keep 11 people employed, if we dont we could have to close and lay off all staff. Any help/guidance would be appreciated. Many Thanks James Hi James,
Wondering if you can give me some advice. My wife and I run a Ltd Company, we have 11 staff, and have some fairly high VAT/NI debts, as well as some moderately small supplier debts. We have made an arrangement with the Tax man to repay over the next 12 months and have made the first payment. Since last month we have had some issues with a couple of clients and it looks as though our revenue will now decrease. We still have a viable business and dont want to close but think almost certainly we wont be able to maintain our payments.

If all was going well I would like to offer to one of our members of staff a small amount of equity in the company. However with the potential problems looming its not a good time to do so.

Where do I stand with closing this company and starting up another one (potentially with the member of staff as a shareholder/director). Can we close down and leave our debts behind, and re-open in the same market place but with completely new name etc? In so doing we could keep 11 people employed, if we dont we could have to close and lay off all staff.

Any help/guidance would be appreciated.

Many Thanks
James

]]> By: James Green http://link4business.info/2009/04/how-to-close-down-your-limited-company/comment-page-1/#comment-9759 James Green Sat, 21 Aug 2010 10:24:02 +0000 http://link4business.info/?p=570#comment-9759 Sandra, a lot will depend on the wording of the Articles of Association of the company and also any shareholders agreement which might be in place. Directors can block transfers but they need to have a good reason. Remember that the Articles of Association is not the only document which needs to be considered. Depending on the age of the company the requerements of the 1985, 1989 and/or 2006 Companies Acts have force on the company as do precedent judgements of the courts. Unlike Civil Law countries (France, Germany etc) where everything is laid down in one go, Common Law countries like ours have to look to legal judgements and other legislation. For example if the Memorandum or Articles of Association stated that the company was formed to carry out the business of bank robbery that wouldn't make it legal for the company to rob banks. OK, a bit of a silly example but you get the idea. Other laws override the articles. The normal procedure in a case where a shareholder (in this case the Official Receiver) wants to sell shares is to offer them to the existing shareholders. If the existing shareholders don't wany them the seller can offer them elsewhere - but cannot offer them at a lower price than requested from the people who refused. At that point the directors could refuse a transfer but unless they had a good reason to do so the seller would be able to get a court to overrule the directors. The real problem here, as always in these situations, is the valuation of 5 x nominal (face) value. Valuing unlisted, particularly small familiy companies, is notoriously difficult. Assuming the nominal value is £1 you are facing a bill of £500. The Official Receiver has probably worked out that if you challenged his price it would cost you much more to get the shares valued by an accountant or someone similar. Also if you refused a transfer and the OR went to court you would end up paying more in legal costs. Of course if the shares have a much higher nominal value it might be economic to challenge the valuation but I doubt that is the case. Sorry to say you are probably going to have to pay the requested amount or gamble that the OR can't find a buyer. But bear in mind even if the OR doesn't sell the shares he/she will be able to block anything that you want to do. The OR could stop the payment of a dividend for example and at the end of the day could simply stop the company operating. Indeed any buyer could do that so whilst it may annoy you I am afraid that the pragmatic answer is to pay up. Sandra, a lot will depend on the wording of the Articles of Association of the company and also any shareholders agreement which might be in place. Directors can block transfers but they need to have a good reason. Remember that the Articles of Association is not the only document which needs to be considered. Depending on the age of the company the requerements of the 1985, 1989 and/or 2006 Companies Acts have force on the company as do precedent judgements of the courts.

Unlike Civil Law countries (France, Germany etc) where everything is laid down in one go, Common Law countries like ours have to look to legal judgements and other legislation. For example if the Memorandum or Articles of Association stated that the company was formed to carry out the business of bank robbery that wouldn’t make it legal for the company to rob banks. OK, a bit of a silly example but you get the idea. Other laws override the articles.

The normal procedure in a case where a shareholder (in this case the Official Receiver) wants to sell shares is to offer them to the existing shareholders. If the existing shareholders don’t wany them the seller can offer them elsewhere – but cannot offer them at a lower price than requested from the people who refused. At that point the directors could refuse a transfer but unless they had a good reason to do so the seller would be able to get a court to overrule the directors.

The real problem here, as always in these situations, is the valuation of 5 x nominal (face) value. Valuing unlisted, particularly small familiy companies, is notoriously difficult. Assuming the nominal value is £1 you are facing a bill of £500. The Official Receiver has probably worked out that if you challenged his price it would cost you much more to get the shares valued by an accountant or someone similar. Also if you refused a transfer and the OR went to court you would end up paying more in legal costs. Of course if the shares have a much higher nominal value it might be economic to challenge the valuation but I doubt that is the case.

Sorry to say you are probably going to have to pay the requested amount or gamble that the OR can’t find a buyer. But bear in mind even if the OR doesn’t sell the shares he/she will be able to block anything that you want to do. The OR could stop the payment of a dividend for example and at the end of the day could simply stop the company operating. Indeed any buyer could do that so whilst it may annoy you I am afraid that the pragmatic answer is to pay up.

]]> By: Sandra http://link4business.info/2009/04/how-to-close-down-your-limited-company/comment-page-1/#comment-9638 Sandra Tue, 17 Aug 2010 10:11:56 +0000 http://link4business.info/?p=570#comment-9638 Hello James I have a limited company in which both I and my husband hold 100 shares each. He declared himself bankrupt last year and his shares are in the hands of the OR. They are offering them back to me through and agent and he wants 5 times the face value, even though the company has yet to turn a profit. Our Articles include a clause that I, as sole director, can refuse any transfer and we have told the agent that he cannot therefore sell them to anyone else. They seem to think that the OR can override the terms of our articles. Can this be true? Regards Sandra Hello James
I have a limited company in which both I and my husband hold 100 shares each.

He declared himself bankrupt last year and his shares are in the hands of the OR. They are offering them back to me through and agent and he wants 5 times the face value, even though the company has yet to turn a profit. Our Articles include a clause that I, as sole director, can refuse any transfer and we have told the agent that he cannot therefore sell them to anyone else.
They seem to think that the OR can override the terms of our articles.
Can this be true?

Regards
Sandra

]]> By: Phil http://link4business.info/2009/04/how-to-close-down-your-limited-company/comment-page-1/#comment-9483 Phil Wed, 11 Aug 2010 07:37:07 +0000 http://link4business.info/?p=570#comment-9483 Good morning, I was appointed as a director of a company last year I received a letter from Company's house to that effect), and have recently found out that the company has closed. Should I have been involved in that decision, even though I am not a shareholder or owner? Kind regards Phil Good morning,

I was appointed as a director of a company last year I received a letter from Company’s house to that effect), and have recently found out that the company has closed.

Should I have been involved in that decision, even though I am not a shareholder or owner?

Kind regards
Phil

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