Wrapping up a small limited company

Diego

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In January 2008 I set up a limited company, an online shop. I took a loan of €25k with Bank of Ireland and it was repayable over 2 years. This was in April 08. There were a variety of delays and the shop itself didn't launch until December 08. Because of this delay, most of the loan went towards repaying the loan and by the time we launched there was only a small bit of cash left for marketing and the launch I had in mind. I'm now in the position that there's no money coming in and the bank is owed €16,500. I have no personal guarantee for the loan and amn't in any big debt to the Revenue. Can anyone advise on the options and implications of liquidating the company? I have a small amount of stock, but nowhere near €16,500's worth.
Any advice is appreciated :confused:
 
i would be very surprised if the bank gave you a loan without any security - check this out before you go any further.
you have the option of liquidating the company and not paying back the bank but this will effect your credit rating and given the amounts involved and the amounts involved with liquidations it may not be the best option. what does your accountant say?
 
I agree with previous poster.
Many ppl think they did not sign a personal guarantee but at the time when you got the loan you may find you did. You should check this out in the first instance

If you decide to go down the liquidation route, the stock the Company has (provided it is not subject to retention by suppliers) would go against the liquidator's costs.

If what you say is correct and the Company is as you say, I'd imagine you'd get a liquidation done for about 8k plus VAT. Company's that have a longer trading history and large number of creditors would cost more to liquidate do the issues involved.
 
You need to talk to the bank to confirm that you do not have a personal guarantee. I have seen this before and it seems that during the good times and with certain people that for some reason the banks did not look for personal guarantees. You also need to talk to the bank to the bank because it keeps the relationship going. Again from my own experience they can be quite forgiving of ligitimate business failure of honest people but they need to be kept in the know.

The only thing you have to be concerned about is the investigation that a liquidatior has to carry out and his/her report to the Office of the Director of Corporate Enforcement. But again a ligitimate director of a failed business has nothing to worry about.

It is best to tackle this problem and talk to an insolvency practitioner and get the issues put to bed sooner rather than later.

Also, I know if your company is straight forward you can get the company liquidated for less than 8k.
 
You will get what you pay for when it comes to a Liquidator. I know from past experience that around 8k is an appropiate for the work involved in this case.

Many armchair liquidators do not realise that a signficant amount of time must go into the investiging the insolvecy of the Company and a comperhensive report must be filed with the Director of Corporate Enforcement.

Currently, insolvencies are boom time for accountancy practices and I'm sorry to say like in the boom time with builders, there are cowboy liquidatiors out there who will charge a fee and do nothing.

When you agree that you need to go down the liquidation route, you need someone with experience, liquidators do have various obligations under Company Law some of which are not being adhered to by many 'cowboy' liquidators.
 
Agree totally with JW2002s post! I think it is getting ridiculus accountants with no experience calling them liquidators just to make a few euros. It is a highly specialised area and not for the faint hearted.

But it does appear that even the liquidators with a lot of experience have dropped their fees. Presume this is a combination of a competative market and obviously after years of experience they are much more efficient that they where when the Company Law and Enforcement 2001 came into force.
 
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