Running my Husband's business with him...

brownsucre

Savvy_Sue wrote: »

this is crucial: if the ltd company is £50,000 in debt, then there's a real chance that it is trading while insolvent, which is a Really Bad Idea. If the company appears solvent, but only because you / your husband are propping it up with personal debt, that's not a lot better. Are returns to Companies House and HMRC up to date?

I'm not going to be surprised if the OP comes back to say there is no accountant, and they've been doing the accounts themselves (or not really doing them at all) ... because I can't help feeling that any half-decent accountant would have been registering serious concern some time ago. I hope I'm wrong!

Hi, thanks for your questions... Yes, there is an accountant. And he does pay tax, and boy, is it huge! Honestly, it just amazes me how we even survive! It's basically loans and credit cards that we're using to run things at the moment. When big sales come in, it is to offset a few debts, pay suppliers, etc etc... and hardly any left overs - and of course, we use our personal money too. But now that I am now involved in checking the accounts, I know that things can start being salvaged. For one, there will be no more room for my husband to mess with money again! Unless I go to bed and never wake up. I have sworn that I am not letting him be the only one looking at the business account alone, anymore.

brownsucre

Seanymph wrote: »

Does 'the business' owe £50,000 - or your husband - or you both as a couple privately?

Where the debt sits is crucial to how involved you already are.

Thanks for your question... So, my husband owes credit card and Loan debts, which is used to fund things to run the business. All this I discovered this January. In the past, (when I stopped work - when I had our first child) I had always asked him to allow me view the accounts so that we make budgets and work out how some debts can be offset (when big sales come in). But he would always ignore me or make a face... After the discovery of his misbehaviour of our finances with his daughter it suddenly made clear the reason why he never wanted me to go through the company accounts with him. So, as I am now aware, we are starting to tackle the matter step by step. I will hold-off him adding me to the company. But I will be doing the accounts with him till this huge debt has been reduced to a minimum.

brownsucre

ska_lover wrote: »

However much you get involved, or want to get involved - the crux is, that the sales do not come regularly

I think any attempt to repair this business (selling what it currently is) would be like throwing glitter on dog muck.

It sounds to me, that you would all be better shutting it down and getting paid employment elsewhere

Thanks for your opinion.

FBaby

How much has he be giving his daughter? Surely it's not the reason why the company is in such debt.

It sounds like you have both been living with your head in the sand until now. Having three children with a business in huge debts was not the best decision.

It sounds like it's not help with the account but help with the management of the whole business your OH needs if indeed, he has a worthy product.

Its great you are going back to Uni but relaslisticslly, a degree without recent work experience is not going to bring much money to start with unless it is a very niche degree which then means less opportunities coming up.

Maybe it is just a case of sorting out his account but after 10 years, I think you both need to seriously consider whether this is working and how much you are just risking doubling the debt in the next 10 years. Is he contributing towards a pension?

Seanymph

Clearly he has then made some bad decisions, deluding himself that he can either bury it far enough, or bring in enough to offset it - and it looks worryingly as if you are doing the same.

His personal debts are not off-settable for tax purposes I wouldn't have thought, but obviously I'm only going on a snapshot. The whole point though of ltd companies is to minimise the personal risk.

I will tell you something someone once said to me that still resonates. Anyone can run a business at a loss - even my dog - you aren't running a business unless you are making a profit.

Your husband is not running a business - he is borrowing money and working for nothing.

You controlling all money doesn't offer a long term solution - 1) if the business was successful you wouldn't be IN this pickle 2) you aren't his mum, this is your husband and the imbalance you are setting up by taking over does not a marriage sustain.......

You both need to buy into it, and both make changes.

Communication is great, and at least now you know, but nothing you have said so far gives me much confidence that you have actually got a grip on the issues.

Good luck, but now may be the time to get some income rather than education - if he, and you, and business, have to service all of that debt then you need a lot more coming in than going out.

brownsucre

Seanymph wrote: »

Clearly he has then made some bad decisions, deluding himself that he can either bury it far enough, or bring in enough to offset it - and it looks worryingly as if you are doing the same.

His personal debts are not off-settable for tax purposes I wouldn't have thought, but obviously I'm only going on a snapshot. The whole point though of ltd companies is to minimise the personal risk.

I will tell you something someone once said to me that still resonates. Anyone can run a business at a loss - even my dog - you aren't running a business unless you are making a profit.

Your husband is not running a business - he is borrowing money and working for nothing.

You controlling all money doesn't offer a long term solution - 1) if the business was successful you wouldn't be IN this pickle 2) you aren't his mum, this is your husband and the imbalance you are setting up by taking over does not a marriage sustain.......

You both need to buy into it, and both make changes.

Communication is great, and at least now you know, but nothing you have said so far gives me much confidence that you have actually got a grip on the issues.

Good luck, but now may be the time to get some income rather than education - if he, and you, and business, have to service all of that debt then you need a lot more coming in than going out.

I appreciate all the points you have made here, and have taken note. Thanks. But here's the thing: If for example, you make a sale of Fifty pounds, and are left with Ten pounds profit after deducting all costs of making that sale, would it not be wise for you to re-invest that profit in your business? No matter how small a profit is, if you do not plough it back into the business, you are asking for trouble. The January incident opened a lot of secrets that had been going on behind my back. He had practically been looking after his daughter and her family for years. How can you fend for two families! Who messes with their bread and butter, when the source of their daily bread does not come in regularly? Over time, the giving away of money from the business will cause a build-up of debts.
He has practically mismanaged money all these years and now that I know, I am not letting him run this business to the ground any further. This is not about controlling/mothering him - I am just being practical. We both work really hard in this business. From the word go, we have packed stock together and rubbed minds about sales/possible clients. All our hardwork to go down the drain for nothing? Mismanagement of Funds and Lack of communication (with me re the Accounts) is what my husband has allowed to run this business into debts. I know now, from the opinions of many on this forum that it would be a bad idea to have him put my name on the business - so I will not do that but now that I am properly aware of the situation with the accounts, we are running this together - and making the changes together.

brownsucre

chesky wrote: »

Not necessarily. It could be a great product or service, but that OPs husband isn't handling the sales and marketing in a professional manner. It shouldn't take too long to find out and then either put in some good sales people or take a long, hard look at the future.

It is a great and interesting business. Mismanagement of Funds, Lack of discipline for the business is what my husband has allowed to almost ruin it. But now that I know the gravity of things, I have made him look at reality really hard now... I will not allow him add my name on the business but We are going to make the changes together from now on, which of course involves going through the accounts with him (something he has always shrugged off anytime I broach the subject). We have worked really hard from the onset of this business, running it. I will not let him ruin it.

Archergirl

Could he get a part time job?
If the sales are erratic maybe you could do that bit while he earns money elsewhere....

kazwookie

When is the daughter and her family going to pay back the money?

How much did they have in total?

What is the daughter doing now for money / funds?

brownsucre

kazwookie wrote: »

When is the daughter and her family going to pay back the money?

How much did they have in total?

What is the daughter doing now for money / funds?

Thanks... Same question I asked dear husband in January when everything became exposed. Daughter and family paying nothing out of the 'thousands' she has been given... But I don't want to dwell on that. Right now, it's about discipline and the way forward - now that I have become involved in the financial aspects of the business.
Daughter and family now in the UK - thanks to the funds dear husband used to sponsor them over. Daughter and family living off 'benefits' now.