Campbell Crossley & Davis

: If you think the company is insolvent then you should take advice from an insolvency practitioner with a view to liquidating it. The insolvency practitioner will also be able to provide options and solutions for dealing with the overdrawn loan account which will crystallize once liquidation takes place. I am a working director of a company with seven employees. I can see that the business is in trouble; we have cash flow issues and will not be able to pay the wages this month, let alone any notice or redundancies if we reduce the workforce. I would like to wind the business up but I also want my employees to be paid. Have you any suggestions? On formal insolvency, employees’ rights are protected and they receive a payment from a Government scheme in respect of monies owing to them for arrears of wages, holiday pay, statutory notice and statutory redundancy. What they receive is subject to statutory limits which will be explained to you and them by the insolvency practitioner you instruct along with how to claim. It is important that you make sure that your wage records are up to date and available so that claims can be checked properly and P45’s issued. If, as a director, you are also an employee then it is very likely that you will also have a claim. My company’s registered office is also my home address. The company has H.M. Revenue & Customs arrears and H.M. Revenue & Customs are writing to the company threatening distraint. Does this mean they will come to my home and take my personal belongings? No, H.M. Revenue & Customs can only distrain over company assets for a company debt. However, they may still visit your home to see if there are any assets there. Tax arrears suggest insolvency issues, you should take proper advice from an insolvency practitioner as soon as possible. If I put my company into insolvent liquidation can I be a director in the future? Unless, you are disqualified from acting as a director for a period or personally bankrupt you can be a director of other companies. The only restriction on you is that you generally can’t use the same or a similar name or trading name. Speak to an insolvency practitioner for more information. There is no money in my company, only liabilities. It’s cheaper to apply for a strike off rather than liquidate isn’t it? You can apply to strike off your company if it has no assets and has been dormant for three months. However, you still have to advise creditors and HMRC are likely to object, stopping the process. Even if they do not, a company can be put back on the register once it has been struck off if a creditor thinks this should happen. Liquidators can provide finality and it is worthwhile taking advice on the options available and associated costs before doing anything. The answers on these topics are provided as a general guide only and should not be relied upon as specific advice on specific circumstances. Campbell, Crossley & Davis offer a free initial advice meeting to discuss your specific query in detail. To arrange this please call us on 01253 349331.