Reply to: Selling Ltd Co with debt

[avonleigh]

Nobody is going to buy your company if you only offer a consultancy without any product. HMRC will come after you and you will have to declare bankruptcy if you cannot pay. Can't say I have any sympathy. Not making provisions for tax is irresponsible and not fair on the rest of us.

[Netraider]

Thanks to everyone who responded so quickly and honestly. It’s what I expected and deserved.

I’ll investigate all possibilities with everything you’ve said in mind.

HMRC will run out of patience and apply to court to compulsory liquidate your company. You will have an appointment with the official receiver who will go through the business finances with a fine tooth comb.

At this point if you have outstanding directors loans they will come after you and your assets. If you have an outstanding BBL then... I wouldn't like to be you.

[cojak]

Seriously you people! You have all missed on the OP's actual intentions. What s/he wants to know, what if he sells the LTD company owing Corp tax and HMRC penalties to a friend/ family who has no assets, and so the creditor (HMRC) cannot reasonably pursue, does that leave him off the hook? Presumably the new potless owner cant be taken to court as they have no assets of their own, the the OP is out of the picture as he has no connection to the company anymore.

So what the OP wants to know is, does that sound like a plan ?

But living me with a tulip credit rating. I wouldn’t want that guy to be a friend or family member, he’d definitely be a fraudster and I’d set the police on him.

[BlueSharp]

So reading up on this seems only to be viable if a plan to turn the business fortunes is viable.

I wonder if the seller would be on the hook for the liquidation costs if they took on a company with no prospect of being recovered if that was the ultimate fate of the company; but with the benefit of being removed from the liquidation process. The directors would still have to pay back the director's loan as a debtor to the company during the liquidation process. Interestingly none of the business's websites goes on to say what they once the company has been bought.

[northernladuk]

You missed the bit where he mentioned that he has directors loans. Those loans tie him to the company. He has a connection.
As for selling it to a friend/family member who has no assets, this sounds like the suggestions we would have had from one of our old members who would happily suggest deliberate fraud at every opportunity.

You mean it's a little PSCONT'ish? Thats was my first throught as well.

[WTFH]

Seriously you people! You have all missed on the OP's actual intentions. What s/he wants to know, what if he sells the LTD company owing Corp tax and HMRC penalties to a friend/ family who has no assets, and so the creditor (HMRC) cannot reasonably pursue, does that leave him off the hook? Presumably the new potless owner cant be taken to court as they have no assets of their own, the the OP is out of the picture as he has no connection to the company anymore.

So what the OP wants to know is, does that sound like a plan ?

You missed the bit where he mentioned that he has directors loans. Those loans tie him to the company. He has a connection.
As for selling it to a friend/family member who has no assets, this sounds like the suggestions we would have had from one of our old members who would happily suggest deliberate fraud at every opportunity.

[Nava39]

Seriously you people! You have all missed on the OP's actual intentions. What s/he wants to know, what if he sells the LTD company owing Corp tax and HMRC penalties to a friend/ family who has no assets, and so the creditor (HMRC) cannot reasonably pursue, does that leave him off the hook? Presumably the new potless owner cant be taken to court as they have no assets of their own, the the OP is out of the picture as he has no connection to the company anymore.

So what the OP wants to know is, does that sound like a plan ?

[BlueSharp]

The other aspect here is money laundering and fraud, who exactly wants to buy the company, will they push dirty money through the company to clean it?

[cojak]

crossroads has succinctly defined that hotter and deeper water…

Debt firm buys TipTopps Ltd.

Ltd is owed £thousands in Directors Loans to TipTopp. Do these loans exceed the HMRC liabilities? Does TipTopp have assets to this value?

TipTopp is bankrupted by the new owners, they settle HMRC liabilities and keep the rest.

[Crossroads]

Debt firm buys TipTopps Ltd.

Ltd is owed £thousands in Directors Loans to TipTopp. Do these loans exceed the HMRC liabilities? Does TipTopp have assets to this value?

TipTopp is bankrupted by the new owners, they settle HMRC liabilities and keep the rest.

[Lance]

I believe there is a small market for companies in debt being bought out, and the purchaser can settle things and uses the losses to offset the profits of other companies owned by a same parent company. For tax reasons, as always.

But, I very much doubt they'll take on a company with a debt to HMRC, particularly if it is due to the director (ab)using funds that should have gone to the taxman.

there is a market, but it's way more complex.

If the company has just debt of say £100k, then they can pay off the £100k debt and save £20k CT.
Total cost of that is £80k.... and they still have to wind up a company.
So it's still not worthwhile buying unless there are some other assets (buildings, debtors, goodwill etc.)

Buying a technically insolvent company may work out, but not a PSC with a chunk of debt to anyone (HMRC or other). There has to be something of value in the company.

[Paralytic]

I believe there is a small market for companies in debt being bought out, and the purchaser can settle things and uses the losses to offset the profits of other companies owned by a same parent company. For tax reasons, as always.

But, I very much doubt they'll take on a company with a debt to HMRC, particularly if it is due to the director (ab)using funds that should have gone to the taxman.

[cojak]

Anyone willing to buy it is gonna own your arse!!!

Absolutely this.

Take a lot of care that you don’t jump into hotter and deeper water than you’re in right now.

[GregRickshaw]

This can only be a wind up (pardon the pun)...

[BlasterBates]

It looks to me like the deal is they buy your company, bail you out and earn future profits. This will work if you own a restaurant but not as a PSC.