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Senior Partner
Senior Partner, Solicitor
Category: UK Bankruptcy Law
Satisfied Customers: 13323
Experience:  30 years in commercial law
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I am a director and Company Secretary of a small Ltd company,

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I am a director and Company Secretary of a small Ltd company, in the last few weeks we have run into financial difficulty and have some overdue outstanding invoices. Recently our main business plan to bring revenue into the company has also run into difficulty's with the loss of a major order. Is there a short list of things I should now be doing that would secure our LTD liability and at what stage should we start to look at winding down the company?
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Customer: replied 3 years ago.
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Thanks for your question.

The critical issue is whether there is a reasonable prospect of you being able to pay your creditors. If you carry on trading are you improving the position or making it worse? If by trading you are increasing your deficit and there is no immediate or realistic chance of wither getting additional funding then you should cease trading immediately otherwise you will render yourselves liable for trading whilst insolvent.

Determining the reasonable prospects is based upon a sensible businessman so is not an absolute standard.

PAYE and VAT both have priority and if you default in the payment of either of those you will also be personally liable.

If you determine you are insolvent you should immediately resolve to cease trading and wind the company up. You should contact an insolvency practitioner to do this.

If there is a prospect of selling the business as going concern to realise value you can try to do that otherwise you should lay off all the staff. When the company is liquidated they will be able to claim some back pay and redundancy form the national insurance fund.
Please let me know what else I can tell you.

there is a lot of info on the Insolvency service website

Senior Partner, Solicitor
Satisfied Customers: 13323
Experience: 30 years in commercial law
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