We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Bankruptcy & Ltd Company

Does anybody have any info or advice on the following with regard to tools of the trade?

I'm looking at filing for bankruptcy (excessive personal debts etc..+ advice from CCCS)

I've been 'self employed' in the form of operating as a Ltd company (accountants advise....accontants fees!!!...impartial ???)

All the equipment / tools of my trade are owned by the Ltd company, if I go bankrupt, will I be able to keep these 'tools of the trade'?

Thanks

Comments

  • PixiePie
    PixiePie Posts: 875 Forumite
    If they are owned by the company then there are not yours and not subject to the BR, however, if you are in reality operating as a Ltd company but only as you, then as the director you have liability to the level of shares issued (which in our case is only £1 so not a prob :D ) but also the BR means you can no longer be a director without special permission, so you might have to collapse the Ltd or find another Director. If you find another director, as the business stil owns the tools then not a problem surely, if the business doesn't really own the tools though there might be problems obviously as it's back on you owning them and them being an asset. If it collapses and reverts back to sole traders, surely you buy the tools off the business (for a pound, say) and then they are assets for you. Buuut - if you then can't work because you don't have the tools needed I can't see this being a good thing in the eyes of the OR.

    HOWEVER - this is just my fuzzy brain thinking out loud. You need to check with CSSS/CAB/National Debt line/Business Debt line - business debt line should know for sure, national debt line seem to refer me to them when anything concerning the business comes up. Um, anyone else got better advice? :S
    Do not feed the trolls please.
  • Richard_S
    Richard_S Posts: 4,432 Forumite
    0002 wrote: »
    Does anybody have any info or advice on the following with regard to tools of the trade?

    I'm looking at filing for bankruptcy (excessive personal debts etc..+ advice from CCCS)

    I've been 'self employed' in the form of operating as a Ltd company (accountants advise....accontants fees!!!...impartial ???)

    All the equipment / tools of my trade are owned by the Ltd company, if I go bankrupt, will I be able to keep these 'tools of the trade'?

    Thanks

    Hi 0002,

    The equipment and tools belong to the Ltd Co but that doesn't stop you from using them and unless you're in the process of winding up the company, or a creditor is petitioning for a liquidation, then you'd have access to those tools until such time as the company is dissolved, liquidated, struck off.

    Presumably the value of those items would not be excessive and you would at some point be able to purchase them to use as a sole trader or partnership. Providing there are no complications with your bankruptcy you'd be discharged after a maximum of a year and an "arms length" sale of the tools from the Ltd Co to yourself would be perfectly legitimate.

    You could always consider renting the tools from the Ltd Co. until such time as you were able to purchase them outright.

    Regards

    Richard
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    Richard_S wrote: »
    It would be best if you started a new Thread so people can see your questions in their own right.

    I'll pop that in a new thread for redjellybean. :)

    HERE: Bankruptcy & Ltd Company
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.9K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.