Legal Advice - Any PH Law bods able to help?
Discussion
Hi all,
Question aimed squarely at anyone who may know the best (most economical) way to go about winding up a company (or three)?
Any insolvency practitioners?
A very close friend of mine has 3 companies, all the same "lot" of people from what I gather, who owe him money. They will not respond to his letters and he has been owed for over 3 years. He wants to wind up the companies, as they cant pay (IIRC latest co accounts show them as insolvent), so no point trying to get a judgement against them, they are likely to continue to obtain credit, albeit small amounts, from others, and simply because its now a matter of principle.
Problem is I've seen quotes ranging from £1,700 to £2,500 per company.
Is there any cheaper way of doing this, especially given that they may not even bother to pay to defend themselves? If they do, can it later be passed onto a professional, without them frowning too much?
Is there any way of doing this without a solicitor? My research on the matter has led me to believe that it IS possible, via a statutory demand, and then if they still fail to make payment (which they will) after 21 days, to wind them up?
Someone else advised that you dont necessarily need to do a statutory demand, instead just straight go for a winding up petition. Is it a good idea to proceed in that way?
Finally, can this be done in a county court or is the lovely building in Strand to be visited?
Your replies are much appreciated
Question aimed squarely at anyone who may know the best (most economical) way to go about winding up a company (or three)?
Any insolvency practitioners?
A very close friend of mine has 3 companies, all the same "lot" of people from what I gather, who owe him money. They will not respond to his letters and he has been owed for over 3 years. He wants to wind up the companies, as they cant pay (IIRC latest co accounts show them as insolvent), so no point trying to get a judgement against them, they are likely to continue to obtain credit, albeit small amounts, from others, and simply because its now a matter of principle.
Problem is I've seen quotes ranging from £1,700 to £2,500 per company.
Is there any cheaper way of doing this, especially given that they may not even bother to pay to defend themselves? If they do, can it later be passed onto a professional, without them frowning too much?
Is there any way of doing this without a solicitor? My research on the matter has led me to believe that it IS possible, via a statutory demand, and then if they still fail to make payment (which they will) after 21 days, to wind them up?
Someone else advised that you dont necessarily need to do a statutory demand, instead just straight go for a winding up petition. Is it a good idea to proceed in that way?
Finally, can this be done in a county court or is the lovely building in Strand to be visited?
Your replies are much appreciated
If the companies are insolvent, then winding them up i.e liquidating their assets, will not generate sufficient fund to settle their debts. So, in the end, your friend will have achieved nothing.
Are these companies continuing to trade?
If they are, can they really be insolvent?
If your friend can prove in court that the directors of these companies are continuing to trade whilst insolvement, you might be able to bring a charge of fraudulent or (at least) wrongful trading against them. However, it still might not result in their debts being settled so it may not be worth going through all the hassle.
Are these companies continuing to trade?
If they are, can they really be insolvent?
If your friend can prove in court that the directors of these companies are continuing to trade whilst insolvement, you might be able to bring a charge of fraudulent or (at least) wrongful trading against them. However, it still might not result in their debts being settled so it may not be worth going through all the hassle.
Thanks guys,
I'm not 100% conversant with the whole situation but from what I understand the companies *may* be insolvent, the accounts are not completely current, but show that they have - net assets.
What I'm ideally looking for is someone to advise on the proper procedure, and whether it can be carried out by him personally, via his company, or it must be carried out by a solicitor. I *think* a company MUST be represented by solicitor, but a individual can do it without?
If he cant then he might not really want to waste £7,500 on "principle"... but if he can and it only costs him circa £2,500 he'd be willing...
Eric, I have told him the same and to just save his money but he thinks its a matter of principle? Oh well, his money not mine...
Matt, what I think you are thinking of is the next step, which is when all creditors submit a proof of debt... and then wait to see that they will get.... nothing
A company can be insolvent (shouldnt trade except in exceptional circumstances, but many do) but not in liquidation, no creditor meetings etc. Liquidation and winding up are slightly different.
Thanks for your comments guys, much appreciated.
I was betting there were some city lawyers on PH This was really a ploy to get them to reveal themselves...
No seriously, it would be interesting to know as you never know it could come in handy.
I'm not 100% conversant with the whole situation but from what I understand the companies *may* be insolvent, the accounts are not completely current, but show that they have - net assets.
What I'm ideally looking for is someone to advise on the proper procedure, and whether it can be carried out by him personally, via his company, or it must be carried out by a solicitor. I *think* a company MUST be represented by solicitor, but a individual can do it without?
If he cant then he might not really want to waste £7,500 on "principle"... but if he can and it only costs him circa £2,500 he'd be willing...
Eric, I have told him the same and to just save his money but he thinks its a matter of principle? Oh well, his money not mine...
Matt, what I think you are thinking of is the next step, which is when all creditors submit a proof of debt... and then wait to see that they will get.... nothing
A company can be insolvent (shouldnt trade except in exceptional circumstances, but many do) but not in liquidation, no creditor meetings etc. Liquidation and winding up are slightly different. Thanks for your comments guys, much appreciated.
I was betting there were some city lawyers on PH
This was really a ploy to get them to reveal themselves... No seriously, it would be interesting to know as you never know it could come in handy.
AFAIK there are two ways for a company to normally enter into liquidation:
1 - Directors call a meeting to place the company into liquidation, wether solvent or insolvent, normally with the "assistance" of a licensed insolvency practitioner. A licensed insolvency practioner will only normally get involved if his fee for convening a meeting is guaranteed.
2 - Creditor petitions to court for the compulsory winding up of the company on the grounds of a proven unsettled debt. In this instance the petitioning creditor would have to put the court in funds, to effectively pass onto the Official Receiver to so say cover the initial costs of liquidation (this is a fixed amount per company).
DAZ
(Take the above with a pinch of salt, I left the industry 4 years ago and things have a habit of changing)
>> Edited by dazren on Thursday 13th May 17:16
1 - Directors call a meeting to place the company into liquidation, wether solvent or insolvent, normally with the "assistance" of a licensed insolvency practitioner. A licensed insolvency practioner will only normally get involved if his fee for convening a meeting is guaranteed.
2 - Creditor petitions to court for the compulsory winding up of the company on the grounds of a proven unsettled debt. In this instance the petitioning creditor would have to put the court in funds, to effectively pass onto the Official Receiver to so say cover the initial costs of liquidation (this is a fixed amount per company).
DAZ
(Take the above with a pinch of salt, I left the industry 4 years ago and things have a habit of changing)
>> Edited by dazren on Thursday 13th May 17:16
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