Creditors Voluntary Liquidation (CVL) - recommended licensed insolvency companies?

[Lance]

Insolvency is a major pain when it includes the bounce back loan, as dividends are deemed inappropriate but salary and materials are ok.

It's nothing to do with it being a BBL. And everything to do with it not being profit.

Dividends come from profit ONLY.
Salary is an expense. You can go bust by paying a salary but not by paying dividends (not without breaking the law).


EDIT: I wonder how widespread it will be where business are effectively bankrupted by taking a loan that they think never needs to be paid back. There is a big difference between a government backed loan and a loan that never needs to be repaid. I'm not suggesting that fits the OPs position but I bet loads of other wise viable businesses will be trashed from taking this loan.

[northernladuk]

It's nothing to do with it being a BBL. And everything to do with it not being profit.

Dividends come from profit ONLY.
Salary is an expense. You can go bust by paying a salary but not by paying dividends (not without breaking the law).


EDIT: I wonder how widespread it will be where business are effectively bankrupted by taking a loan that they think never needs to be paid back. There is a big difference between a government backed loan and a loan that never needs to be repaid. I'm not suggesting that fits the OPs position but I bet loads of other wise viable businesses will be trashed from taking this loan.

What is the longer term fall out from going through CVL? Surely it can't just be a matter of starting another and off you go?

[Lance]

What is the longer term fall out from going through CVL? Surely it can't just be a matter of starting another and off you go?

Not much that I know of.
You’ll never a bank to loan your company money without a debenture, but contractors don;t need that.
As long as you’re not struck off there’s not a lot of impact.
Limited liability....

[Paralytic]

What is the longer term fall out from going through CVL? Surely it can't just be a matter of starting another and off you go?

There are some restrictions about restarting a company with the same/similar name for a period of time. Ask your accountant if you want more details

Or read here: Section 216 | Reusing a Company Name After Liquidation

[northernladuk]

There are some restrictions about restarting a company with the same/similar name for a period of time. Ask your accountant if you want more details

Or read here: Section 216 | Reusing a Company Name After Liquidation

That only talks about a same or similar name so not really relevant.

[Paralytic]

That only talks about a same or similar name so not really relevant.

You asked for any long term recourse - I showed there is. If you think that is irrelevant, so be it.

[creativity]

CVL's shouldn't be taken lightly. You have to hand over all of your accounts to a licensed practitioner who is acting on behalf of HMRC, even if you are paying them. They will spot any illegal dividends or dodgy accounting immediately and hold you accountable.
Worst case scenario is you get a bill and can be held personally responsible for money owed due to being miscreant and be banned from being a director.

My accounts are honest and I have no illegal dividends but need to consider worse case scenario where contracts dry up completely (IR35 is not helping) and the limited company profits drop substantially.

It's a moot point for me now as I've taken on permanent work, so the company will just hang on to its product income which will keep things afloat and I'll remove myself the paid salary and dividends. The company will pay back the loan and be solvent but a shadow of its former self. Probably transfer all the profit into private pension so as to have little in the way of tax.

I guess my original post was asking if anyone knows or have used a CVL practitioner, there are lots out there but many aren't licensed (but will likely be happy to take your money), so would advise anyone to confirm their license number first.
There are generally two ways a CVL practitioner can be instructed; by the director (voted) or by a creditor. The latter being cheaper as the creditor will pay most of the costs.

Clearly no one has used a practitioner but that's fine.
Keep up the good work.