Cost for liquidation? 1-employee company, no stock, Revenue only creditor

J

johnnycope

Guest
So I've got to liquidate my small business (only employs me now), and have debts of about €50k to Revenue. They are my only real creditor - I have a business loan, but it comes with a personal guarantee. I just want to have this liquidation done and over with - Revenue are getting more and more demanding, I'm just not making the income to cover this, and it's put me under a lot of strain over the past while.

I have two questions, it'd be great if you could give some advice.

1. How much will the liquidation cost? I've checked around AAM, but get wildly varying estimates. I have no stock (services business), I'm the only employee, paperwork is fairly minimal, and I'm based outside Dublin. What would the likely cost be?

2. Is there a chance that Revenue will chase me privately for the debt?

Thanks in advance for any advice you can give.
 
Yes. Been going about 7 years, started to get in trouble with rest of economy, so I laid off the other person who was working for me. After a bit of burying head in sand, I've realised that liquidation is the only way here.
 
If you are limited the revenue will not be able to make you pay personally.
 
Yes, I'm a limited company. My worry is that I would get pulled up for reckless trading, as I ran up a bit of VAT while trading, but basically it was living expenses as I made very little the past two years.

Any idea on the costs of liquidation for such a small outfit with just one creditor?
 
Normally the revenue would do the liquidating and its costs would be taken from what could be sold.
 
Hmmm, but I wanted to be proactive here and liquidate the company myself...
 
Time said:
If you are limited the revenue will not be able to make you pay personally.
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This is not entirely correct! There are provisions where by liquidator could apply to the courts to have the vial of incorporation lifted, if it can be shown that the company was operated in a reckless manner. The most obvious being to carry on trading after it was clear that the company had become insolvent. It would come down to weather or not the liquidator or other interested parties for that matter, thought it was worth while to do so.

Jim.
 
Of course. One would have to be trading in bad faith for any of that to happen.
 
johnnycope said:
Revenue are getting more and more demanding, and it's put me under a lot of strain over the past while.

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It's revenue's job to do this, they have procedures to follow but if you engage with them and explain the situation directly to them it can defuse the pressure. Make sure you talk to the right person that is the key. Once they realise there is no money there to take they should back off. But make sure you are upfront and honest. Revenue are writing off monies owed.
 
Thanks for the advice all. So what are my options here? I owe Revenue about €50k, but really I think liquidation is the only option.

What should I expect to pay to liquidate the company with monies owed?
 
Try these [broken link removed] (no affiliation)

Some are charging 2k -3k while others are charging 5k - 7k.

I would liquidate too. Don't worry too much about reckless trading. Its very costly to take this action and action is only taken if its obvious you have recklessly traded and that you have money personally. Very rare for action to be taken by liquidator. Revenue will go along with whatever the liquidator decides so talk to the liquidator first for his view.
 
The liquidator submits a report to the office of the director of corporate enforcement, The OCDE makes the decision on whether or not to take actions against the directors.

The Revenue may write to the OCDE, as may any Creditor or any member of the public regarding any case.
 
Paddy199, J. Ryan, thanks for the advice on this. I've found this to be a stressful time, and I just want to put it behind me. Liquidation is really the best option here, it'll be a weight off my shoulders.
 
J. Ryan, not quite correct. He does make a report to the ODCE but can also take legal cases too. See one recently taken here [broken link removed]

As I said earlier, a liquidator will only take a case if he smells money somewhere else. Revenue usually row in behind whatever decision is taken by a liquidator. Obviously the bank is different as they have a PG.

My advice, get a 'friendly' liquidator. If you control the creditors meeting via proxy or whatever, you will have control over what liquidator is appointed. So to do this, you will need the revenue and bank to support your appointment. There vote will only be counted if they turn up. Speak to a liquidator and they will meet with you and discuss all this with you.
 
If part of the O/S Revenue debt relates to PAYE/PRSI on directors remuneration the Revenue are legally entitled to follow the directors (proprietory) personally for this money. They are using this clause.
I have experienced instances where directors have voted themselves salary whilst the company owed them 100s of thousands in their directors current account. The directors were still forced to pay the tax on their salary despite the company being liquidated.
 

From a PDF issued by the OCDE, linked to point 6 on this page
[broken link removed]


"If the company is insolvent, liquidators must also:​


•
apply to the High Court to restrict each of the directors from being
involved in certain other companies unless the ODCE tells them not
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to; and
• ​

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within six months of being appointed, give the ODCE a report
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about the company directors’ conduct in the 12 months before the​

liquidation."

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As the company is insolvent the OP has no choice in who is appointed liquidator. The creditor in this case the Revenue will get to choose.
 
Not quiet true, the directors can appoint a liquidator prior to the creditors meeting, should the the meeting not vote on an alternative then that liquidator stays in position.

The Revenue rarely votes at such meetings as once it does, it loses its preferential status.
 
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