Ltd Company Needs Emergancy Help

clothing_business

Right guys and girls I am desperate for your help on this one.

I am the managing director of small independant clothing business and have been running at a loss for the last 5 years and plowing my own money into the business to try and make it work, unfortunatly it hasnt. I then decided to take action about this after being told by my accountant that i either have to reduce my overheads significantly or close.

I then had a meeting with the managing agents of the centre and explained the situation as i owed them £22,000 in back rent on the unit. I said to them at this point that I was just going to clear the additional stock online and I would pay back £15k over 10 years as this is what I could reasonably afford. They asked me what I would do in the future, I said that if another unit became avaliable that was cheap enough 75% cheaper than the one I was in (sorry guys dont want to give rental figures on this one) then I would consider this, no objections were announced and they then agreed to take the lease back from me under common law.

I had been in this centre for 8 years paying good rent over that period and because the recesion hit trade took a huge nose dive and the landlords were not willing to reduce their rents enough to keep me as a tenant. At this meeting I took with me my accounts for the last 3 years to which when they read and sympathised with me.

I also do another job as well making £6k a year as didnt take a wage from the business even though it was full time as all self employed people know. My girlfriend used all her savings and also wages to help keep the store going over this period.

A unit then beceame avaliable which we took possesion of 6 weeks after the date we closed the store. No communication had taken place between me and the old landlords between this time, there are no clauses within my lease at the old retail unit that stipulated that I couldnt retail from another location.

However on the day that I opened the new store the centre manager came down to inform me that the old managing agent wasnt happy and that they were going to take me to court. (something they werent going to do if I had not opened a new store)

I have never at any stage said to them that I would not pay the money, in fact a payment offer was made to them which they did not get back in touch with me about.

Me and my partner have spent the last three years basically living in poverty living of £20 a week food, not going out, not taking holidays, basically not doing anything.

The reason I took the new unit was to try and be able to pay people back, I have explained this to them and there not budging.

Basically I wanna know where I stand.

Can they put the company into administration as the old lease was signed in my name personally?

Can they enter the store I am in at present and take stock?

Can they file for Bankruptcy?

Can I get into any trouble with what has happened?

Can they refuse a resonable offer of payment?

If they do go to court what is likely to happen?

Would the judge look favourably on me as I have tried to do everything in the best intrest of the company and not my own personal benefit?

Oh just a note we have no assets or saving as all have been used to keep the business going.

Please guys as much info and help as possible as we are having sleepless nights over this and my partner is on the verge of a nervous breakdown.

Emmzi

Can they put the company into administration as the old lease was signed in my name personally? - yes, if you signed as an agent of the company.

Can they enter the store I am in at present and take stock? - not without a court ruling and then some kind of enforcement order

Can they file for Bankruptcy? - can they file to make you/ the company bankrupt? yes. In fact, it sounds like the business has less than zero asstes so they might be doing you a favour doing this, saving you the fees

Can I get into any trouble with what has happened? - define trouble. You're already in financial trouble.

Can they refuse a resonable offer of payment? - they can decide the company should liquidate, yes

If they do go to court what is likely to happen? = depends, see qs below.

Would the judge look favourably on me as I have tried to do everything in the best intrest of the company and not my own personal benefit? - yes. and they can't take what you don't have. but it'll be a pure financial decision. This is not a jailing offence.

questions - you run a limited company? or a partnership? or something else?
if a ltd co, have you guaranteed anything, and if so, is the g'tee secured
do you own your own home?

[Deleted User]

Sorry but this is way to complicated for you to expect an answer on a forum,what you need is legal advice not the advice of ammateurs,no matter how well meaning they maybe.

PNPSUKNET

if its an ltd company they cant put it into admin, they can however make you personally bankrupt which in turn will mean you having to find a new director for your ltd as you wont be allowed to. You need to consult legal advice.

clothing_business

Thank you for this post Yes I am a limited company I have a personal garauntee on the rent for the previous lease and also with the bank for £25,000 outstanding. With regards to assets I do not own a home I have a car which is about had it, for my topyles with retail I basically have zero business and personal. However I do wish to continue running the business as with the huge reductions in fixed overheads the company will become profitable, not hugely but worthwhile so that it will be worth continuing.

With regards to the fact they could make me bankrupt personally if they chose this route, would the company be able to make say my g/f the new director of the company and how would that work, would bank debts ect be scapped as although they are in the company name it is me who has signed a personal garuntee for these, also would then the outstanding money to the old landlords be scrapped as well as this was signed in my name.

By the way as much information is appreciated as we aint sleeping to well at the moment.

Also if I could show the judge that by opening this store it wasin deed to help pay people back and the fact they have refused a reasonable payment offer go against any claim they may put in.

Would it be wise also to send of the payment offer recorded delivery one was made in a meeting and handed over but nothing signed to say they had ghot this?

Emmzi

The company has 25k debt plus a liability for rent on the lease which you have broken. You have been trying for years to make it work, your money has gone, your g/fs money has gone.

Sometimes, it is time to cut your losses. Even if you went bankrupt, and got a day job, you would have more to live on than you currently have.

Please, please go and have a look at the bankruptcy board. People there can share their experiences. It is not as bad as you think it is. Many many people express relief when the final decision is made, as it stops them chasing round, and gives them a new sense of freedom.

Please go and read, and ask them!

Emmzi

PS to pursue you for the guarantee, first they have to force the company into liquidation. It has no assets and hige debts, they will be able to do this. *Then* they come after you for the guarantee.

There is absolutely no point making your g/f the director. None at all.

Clean break, clean start.

You have my sympathies, a failed business does not make you a bad person, but you are delaying the inevitable.

Clive_Woody

Emmzi wrote: »

The company has 25k debt plus a liability for rent on the lease which you have broken. You have been trying for years to make it work, your money has gone, your g/fs money has gone.

Sometimes, it is time to cut your losses. Even if you went bankrupt, and got a day job, you would have more to live on than you currently have.

Please, please go and have a look at the bankruptcy board. People there can share their experiences. It is not as bad as you think it is. Many many people express relief when the final decision is made, as it stops them chasing round, and gives them a new sense of freedom.

Please go and read, and ask them!

I echo those sentiments.

To me it sounds like it is time to call it a day. You are clearly not afraid of hard work, get a 9-5 job (or whatever suits you) with a regular income, enjoy your life, chalk this up to experience, sleep better and move on.