Advice on possible company wind down

Hi,

I really need some advice for the future of my company. My company is a limited liability company and my wife and I hold the directorships. Over the years I have had several employees but in recent years I have down-scaled to just myself. My line of business is service based dependent on the construction industry which we all know has gone to ruins. Throughout the downturn a few unsavory events have left my company in a poor financial state – some of my debtors have been liquidated and current debtors are refusing to pay. One debtor, who owed 10K, was liquidated and as far as I am aware there is no way to recover that debt.

So here are the facts:

1. Company owes the revenue approx 4K
2. Company owes a range of creditors approx 4K
3. Company bank loan for nearly 25K for which I have given personal guarantees (home).
4. Company overdraft is maxed out at 5K
5. Company assets amount to office equipment (Not including premises)

Business activity is at an all time low and having gone through every cost reduction exercise possible, monthly income is beginning to fall short of monthly expenditure. I have been trying to figure out ways to keep afloat but it does not look promising. I am considering the following:

1. Winding down the company.
As far as I am aware winding down will carry significant costs (arbitrator, liquidator and solicitor) which I cannot personally afford. Even though the Company is limited liability I am still personally liable for the company’s bank loans – could my home be in jeopardy?

2. Since I am self employed I would not be entitled to social welfare.
If the company was wound down could I carry out the same line of business as a sole trader to try and generate some income?
I would really appreciate some advice on this as I am at my wits end.

Thanks.

Hi Company 1,
First of all I want to sympathise with what you are going through. It is a very worrying time. I don't whether your business is viable or not, all I can speak about is my own experience.

I went through a liquidation 8 months ago. I was so stressed leading up to it but once I made the decision it got alot easier. I didn't need to appoint a solicitor, just a liquidator. The liquidator contacted my creditors on my behalf and took everything from there. Over night the calls looking for money stopped. The liquidator paid himself out of the sale of the remaining assets. I would strongly recommend contacting a liquidator as soon as possible and going through the options with them. They are the experts and take everything out of your hands.

With regards your bank loan, if you do liquidate, call them and let them know. They will agree to reduced payments over a longer term and a moratorium for a few months. They did for me. The last thing they want is to take your family home.

You are entitled to social welfare. I thought I wouldn't be but I was. See the many threads about it on this board.

Best of Luck,
DP