Potential creditor access to my limited company?

glvr

Not sure if this question is appropriate, but...

After some very poor years self-employed activity, I have various personal debts (bank, credit card, etc).

As part of getting myself straight again, I'm about to form a UK limited company for which I'll be sole director and shareholder.

I'm wondering whether my creditors can in some way get access to or control of any funds in the company bank account or other assets.

Presumably - although it seems unlikely - they could in some way act to gain control of my one share, and thereafter take control of the company and thus access any funds in the company bank account or other assets.

Am I missing something?

Tixy

Your personal creditors couldn't access the assets of a limted company generally.

I think the only possible way would be if a creditor petitioned for your bankruptcy. I assume if you were declared bankrupt then your shareholding in the limited company would be an asset of bankruptcy. If you were the sole shareholder then I guess the OR would look to see what would be the best action to take with the Limited Company (in theory they could look to sell it or wind it up but it may be that in practice they would consider selling it back to you for a small sum). If you had put a directors loan in to the company then you were declared bankrupt the OR would seek to have the company repay the loan as an asset of the bankruptcy.

This is only a presumption as to what could happen If you think that there is a possibility your creditors would be likely to consider making you bankrupt then definitely seek specialist advice before setting up a ltd company.
If you are repaying your personal debts, even if slowly then it is presumably unlikely they will try to make you bankrupt.

iolanthe07

TBH I think this is the sort of question you should be asking your accountant. Open forums like this one sometimes throw up some very inaccurate replies.

Crossed with Tixy's reply. Tixy is very reliable & knowledgeable.

Tixy

iolanthe07 wrote: »

TBH I think this is the sort of question you should be asking your accountant. Open forums like this one sometimes throw up some very inaccurate replies.

Crossed with Tixy's reply. Tixy is very reliable & knowledgeable.

I am not an expert in bankrupty though so I've already edited my post to say seek advice and to make it clear that it is only my opinion/interpretation as to what may happen.

Ayayermaw

I a roundabout way yes they can mess you up.
If any of your creditors start bankruptcy proceedings against you then as you're a sole owner your company would be wound up, unless you appointed another director before bankruptcy proceedings began.

Even then you'd not be allowed to manage it or be a director, until your bankruptcy is discharged.

glvr

Thanks to you all.

It's not something about which I've thought too much, hence the post.

Of course, with normal assets the route is clear... CCJ and bailiff enforcement - 'we'll have that sofa, and the telly'... but I can't see it extending to 'oh yeah, we'll have that share certificate too'.

I'm not sure what procedure exists for me having to declare assets to creditors - but that would seem to present a route so that company shares could be seized.

Overall, the whole scenario is of course very unlikely, but I'm keen to know the details.

Stewart_78

Good luck with it. I'm so glad we have 2 limited companies. My personal finances went to hell but the companies are OK and continue to trade profitably (finally). It means you don't have to drag up your personal nightmare every time you want a phone contract / supplier limit etc. etc.

Being limited probably saved us from having to sell our house to be honest. Although I doubt any of my debts are legally enforceable but that's for another day.