Some help regarding my small business..

Annisele

Post #6 says it's a limited company.

"Trading whilst insolvent" basically means that a business is continuing to trade even though it can't pay all of its debts as they fall due. (That's not a technical definition, but I reckon it will do in the circumstances).

So - is it reasonable to think that you could trade your way out of your current problems, and pay the debt off? If not, you really do need professional advice. You can find more information here. Worst case, if you are trading whilst insolvent you might wind up:

• Criminally and personally liable for fraudulent trading, ie deceiving creditors, if the company goes into liquidation.
• Personally liable for wrongful trading, ie trading while the company is insolvent, if the company goes into liquidation.

(Quotes from the site I linked to).

In essence, you might lose the protections you get from the "limited" part of having a limited company - and that's really not something you want! Apart from anything else, you could potentially end up having to sell the watch and the car whether you wanted to or not.

Savvy_Sue

Annisele wrote: »

Post #6 says it's a limited company.

Sorry, I missed that first time around, there was quite a bit of rapid posting going on then I reckon!

Even with my limited knowledge I find that what you say makes an awful lot of sense.

OP, did you have an accountant when you first started the company? You may need legal advice as well, but if your accountant is aware of your books then they'd be able to start to advise you.

Horace

OP Most solicitors and accountants will offer a 30 min consultation for free, it is worth taking on board professional advice rather than relying on friends or internet fora.

I don't want to be harsh but you do need to tell your friend regardless of what part of the business he is buying into. Imagine how you would feel if the boot was on the other foot and you bought into a business with massive debts which then became your debts because you didnt know about it.

orleypheous

changing invoices is indeed fraud however re-invoicing and stating that this invoice negates the old one isnt but they must put a reason

JasonT_2

Thanks for everyone's input, I really do appreciate the time people have taken to offer their advice.

I spoke to a solicitor today who was a great help. He spoke to me for an hour & a half for free but said he would have to charge me for any further help I needed.

What sort of reasons would be acceptable for re-invoicing?

coupleuk

Why not get in touch with the company you owe the debt to. Ask them to agree a settlement with you to clear the debt, explaining that your business is on the brink of failure. DON'T treat it like a threat but explain how dire things are and literally plead with them as you don't like the thought that your mistakes might impact on them. Rather than get nothing, Im pretty sure they will agree BUT be sure to get it in writing to confirm the whole debt is settled.

What should you be offering them? - perhaps the same amount that your "friend of a friend" is going to offer you for a 50% share of your (worthless) business.

I can't see any alternative for you as I can't see you paying for a solicitor/accountant to sort it (as you say, you've no money).

Paul

JasonT_2

I did as coupleuk advised & the company have reluctantly agreed to clear the debt for the amount I can sell the 50% for.

Do I need to have it put in a contract or will our emails confirming the agreement suffice?

Oh & thank you so much Paul :beer:

JasonT_2

Anyone?

Mistral001

JasonT wrote: »

Anyone?

I have not participated in this thread, but have just read it with interest.

It would seem you might have quite a future in business despite the one failure.

You asked for advice, assessed it and acted on the relevant pieces of advice.

The solictor seems to have been a gem. He/she was obviously impressed with you. Do not overlook them when you get a little bit of money behind you and need legal advice again.

JasonT_2

Thank you for your kind words Mistral. This whole situation has really knocked my confidence but I suppose we're put through these sorts of things so that we can learn from them & become stronger/wiser.

An update for anyone interested: An agreement has been made to clear the debt for the amount the person buying 50% of the company has agreed upon.

It's such a huge weight off of my shoulders. Thank you very very much to everyone who offered their advice, you've all been a great help & I don't know how I would've managed without your input.