Ltd Company assets and debt after liquidation

[deanc]

i need some advice. despite working hard to build my company, i had an incompetant accountant and a customer trying to sue my company. it's time to bite the bullet. i'm thinking of disolving the company. the company does not hold many assets, van and tools owned by someone else not linked to the business, ( any tools i own i was going to sell off to this person for a very small charge).
[LIST][*]what will happen to my Fines from hmrc[*] what will happen to any tax liability for 2010-2011. [*] what will happen regards the court case of the claimant.

i intend to incorporate another company working within the same industry, i have worked too hard and enjoy the work i do to completely give up. (i would also buy back the tools i sold for a small charge)

is the above legal, and will it bail me out without repurcussions.

thanks

[Moscow Mule]

You probably want to talk to lawyer, rather than a bunch of IT geeks!

However, I do know that you can prevented from being a director in certain circumstances ( if negligence or dishonesty are proven) so I'd do my best to sort it out if I were you...

[Clare@InTouch]

You need to talk to an accountant to explain the situation fully and get specific advice to your circumstances. In general though:

You'll need to pay the HMRC fine and liabilities before you can close - if you claim you don't have the funds to pay and they can prove negligence then in theory they can pursue you personally for the debts. You could try calling them direct for advice if it's a genuine case of you not being able to pay through no fault of your own. Note that they are unlilkely to be sympathetic if you can't pay your tax but you've taken any dividends.

If you're starting a new company doing exactly the same thing then you won't be able to claim Entrepreneur's Relief, so if you do have any funds left they will need to be withdrawn as dividends.

You need to sell the assets at market value, selling them lower could give rise to a benefit in kind.

Your customer can prevent the company being struck off by submitting an objection to Companies House - before striking off you're obliged to inform any creditors of your intention.

It's certainly not a simple case of closing and being able to walk away easily when you have a client trying to sue you and you owe HMRC money. You need to follow proper process in order to avoid problems later.

[VectraMan]

WHS. The company's debts can become your debts under certain circumstances, and trying to get out of paying tax and HMRC fines by shutting down your company sounds pretty dubious. Dissolving the company to get out of a court case doesn't sound smart either.

Before a company is removed from the register, HMRC have to be informed, and there's a three month period where a notice is put in the London Times (or something that sounds like it's stuck in the victorian era). I would think either debts to HMRC, or an outstanding court case would be enough to stop the company being dissolved.

However doing a phoenix (i.e. starting a new company doing virtually the same thing) is a well trodden path for companies that are being strangled by debt, although it can cause difficulties.

But you should really talk to a lawyer.

[Clare@InTouch]

.... there's a three month period where a notice is put in the London Times (or something that sounds like it's stuck in the victorian era).

London Gazette

[PSK]

Sorry to hear about your circumstances. Amongst other issues, if you are a Director then you have duties to the company and through it, to some extent, to it's creditors. As you mentioned the tools, selling tools (company assets if the company paid for them) for a small charge might be an issue should their market value exceed this small charge, especially if you later purchase them back. I can understand if you/the company don't want to incur additional expenditure but the right accountant will have seen such things many times before and will probably save you money and an awful lot of headaches later. In what areas did you find your last accountant to be incompetent?