Bbl loan

Dhaf82

I was a limited company and have been out of work since March due to covid, I took out a bbl loan to tide me over. But the company is now going to be dissolved, and I'll be going paye. Where do I stand with this loan can I transfer it over to my current account and pay it back this way? 

jonesMUFCforever

Have you given the bank any guarantees to pay back company debts?

newdriver101

I don’t think you will be able to dissolve the company if you still have a BBL in place...  This is a debt the company owes and you will have to state whether there are any debts owed by the company before a company can be struck off and even if you do somehow manage to dissolve the company, the company can still be restored if the bank (as a creditor) demands its loan back.  

I do not know the answer - my guess is you have to either keep the company until the BBL is repaid or speak to the bank and ask if they will let you dissolve the company and enter into a new arrangement for repayment but you may not get the same low interest rate....  You may need to keep the company but convert it to a dormant Company until the loan is paid off...

I suspect there will be many more cases like this in the coming years...

Grumpy_chap

If it looks like the BBL was taken with the plan to dissolve the loan and avoid repayment, that could be classed as fraud.
If the loan is to be defaulted, there will be investigation to assess where the funds have gone and that they were used to benefit the business.

Brock_and_Roll

Surely it depends on whether the OP has given any personal guarantees to the bank(s) for the company and the BBL?
If not, then surely the company is is insolvent and and should be wound-up accordingly?

macman

You can't just take money out of the company account and transfer it to your personal account. Unless it's in the form of salary, dividend or a director's loan, you'd effectively be stealing from the company. 
If the company is wound up, then any assets will be distributed to the creditors, of whom your BBL lender is one.

newdriver101

From my reading, OP took out the BBL in good faith and has used this money in good faith - there is no indication of fraud or foul play or that OP is stealing from their company or that OP is willingly declaring the company insolvent to avoid paying the BBL. OP’s circumstances have now changed and OP has had to switch from working through a limited company to working via PAYE.  There is also no suggestion that OP does not want to pay this back - OP clearly states he/she wants to pay back the BBL.  

The question seems to be: 
(1) whether OP can do this from his/her personal account rather than the business account; and 
(2) if OP can dissolve the company as he/she no longer needs the company for work as OP is now on PAYE.

My personal view (assuming there is no element of fraud/foul play/wrongdoing etc.) is, yes, OP can re-pay the BBL from their personal account BUT I do not think OP can dissolve the company just yet because:

- The winding-up of a company is not a simple and straightforward process especially when there is a debt outstanding.  A company must declare that it has no debt before it can be struck off. A notice is put in the gazette before you can wind-up a company and creditors will object to any dissolution if they are owed money.  Remember - this is a government-backed loan so both the government and the banks have a vested interest in coming after you and investigating you as director and the company’s circumstances. I am sure the banks and the government are being extra vigilant when it comes to gazette notices...  

-  The issue of personal guarantees is not really relevant in this case (I don’t think personal guarantees were required for the BBL - OP please confirm?) because OP is not trying to dissolve the company as a way to avoid paying the BBL - which is how/when a personal guarantee would kick-in.  OP has indicated they intend to re-pay the loan they just want to do so from their personal account and close the company. 

The only options for OP that I can see would be to speak to an accountant/lawyer to see if you can convert the company to a dormant company as it is no longer trading (I believe you have to cease trading for a year(?) before you can declare your company dormant - your accountant can confirm) or alternatively, go to your bank and discuss converting the BBL from company loan to a personal loan (the bank may not agree to the same preferential interest rates of the BBL).  Furthermore, this may raise the flags and suspicions Grumpy_Chap talks about above i.e. why the BBL was taken out and whether is was used for the benefit of the company etc. Even though OP may have acted in good faith and above board, attempting to dissolve the company so soon after the BBL may cause further investigation into the uses of the BBL...

Bottom line, it is extremely ill-advised to try to strike off a company when there is a debt in place. Best way forward is to pay back the loan then dissolve the company...

Thrugelmir

What was the loan used for?