Thanks for the call today.
I hope I was able to help you with the issue of members voluntary liquidation (or MVL). I would advise that it is not possible for the directors to swear a Statutory Declaration of Solvency when the company is in arrears with HMRC, no matter how solvent the balance sheet. I understand that an agency is trying to sell the building/ business.
I strongly advise you to bring accounts up to date for 2010 and 2011 quickly.
As the only way ahead, in our opinion, is to keep trading until a sale is achieved (or a very costly liquidation), then a “holding company voluntary arrangement” may be the solution, or a de facto CVA - Plan “A” as we call it.
A firm of turnaround and insolvency practitioners is brought in to take over the creditor management and sets out a plan supported by details financial forecasts, assessment of the business etc The board continue to run the business and are of course still in control. If this buys the company, say 6-12 months to sell and subsequently pay back 100p in the £1 to the bank and ALL creditors, then a MVL can be used in future for a distribution of capital. Or you can sell the company share capital and pay 10% tax under Entrepreneurs Relief. That’s for the future events to determine.
If the above cannot work or HMRC starts aggressive action, then a formal CVA is the next best answer. On a basis that the company pays say £1k per month to unsecured creditors UNTIL the business assets are sold. Then all creditors receive 100p in £1 or as close as possible.
Meanwhile with your personal objectives which are to work much less and look after your health, this creates a bit of a conundrum – in that the business really needs to be driven forwards to ensure a sale in the future. Can family members help out, can you bring in a manager? This needs to be thought through.
A lot to think about ! So we are happy to ask our regional manager to meet up and take you through the options and to map out a solution. There is no charge for a meeting and we will set out a strategy for the business in writing after we have met, but we do need to see filed (or draft) annual accounts and management accounts before the meeting if possible please.