What are the consequences of folding a Ltd Co? | LawHive - Solicitors & Lawyers Online
What are the consequences of folding a Ltd Co?
[England] Hi, I was contracting via my Ltd company for several years, and used some of the profits to buy IT equipment and home office stuff (~£1000 several years ago). All my work dried up when covid hit, I took the full business bounce back loan when needed, but then our wonderful government in all their forward-thinking glory decided to introduce IR35 legislation that has effectively killed the Ltd Co market. There's still contractor work available but none of it goes through the Ltd Co, it's all via Umbrella company. It's clear that I'm not going to get any more Ltd Co income any time soon, the company is nearly out of cash now the repayments are going and the accounts are due in 5 weeks. I've no option, the company must fold. Am I liable to pay anything to arrange this or do I wait for the bank to initiate proceedings? Should I bother with employing an accountant (only loan repayments and minimal costs in last year, no income)? Should I expect someone to turn up at my house to take my Ikea desk, shelving and 3 year old laptop or will they just write it off due to low value? Any advice appreciated

Carlos Grant

19th October 2021

Top Answer
Hi, Are you sure you are not a personal guarantor for this loan. People signed up to these loans thinking there was no come back if the Ltd Co folds but I have heard that's not the case.

Alex Townsend

11th February 2022

+2

5 upvotes

You need to go down the liquidation route: https://www.gov.uk/liquidate-your-company Worth noting, you say you took the full bounceback loan but it sounds like the company had limited running costs when the loans were meant to be to keep businesses afloat. Did you withdraw this loan out for personal use? Just asking because if your directors loan account is blown up because you have taken out the loan and not paid it back then you can be held liable for this money personally.

Mark Betts

11th February 2022

2 upvotes

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