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limited Company

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I am recently bankrupt.

Come theb12 month anniversary and everything being well I will be discharged and will be able to then be director of a limited company.

If I own the company and am director what happens to any assets within the company?  I am talking about mainly equipment used in the daily workings of the business, company vehicles etc.

(Just for clarity the company would be newly formed and would be contnuation my current sole trader business)

Does they continue to be the property of the company.  Would the trustee show an interest in them?  (They are all legitimate business assets.  Nothing hokey going on)

Comments

  • Grumpy_chap
    Grumpy_chap Posts: 18,285 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    BlewIt said:
    I am recently bankrupt.

    Come theb12 month anniversary and everything being well I will be discharged and will be able to then be director of a limited company.

    If I own the company and am director what happens to any assets within the company?  I am talking about mainly equipment used in the daily workings of the business, company vehicles etc.

    (Just for clarity the company would be newly formed and would be contnuation my current sole trader business)

    Does they continue to be the property of the company.  Would the trustee show an interest in them?  (They are all legitimate business assets.  Nothing hokey going on)
    Do you have these assets now as part of your sole-trader business?

    What is your reason for converting from sole-trader business to Ltd Co.?
  • MattMattMattUK
    MattMattMattUK Posts: 11,208 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    BlewIt said:
    I am recently bankrupt.

    Come theb12 month anniversary and everything being well I will be discharged and will be able to then be director of a limited company.

    If I own the company and am director what happens to any assets within the company?  I am talking about mainly equipment used in the daily workings of the business, company vehicles etc. 
    If you own the company and by proxy it's assets, what has happened to them as part of the bankruptcy process? Has you retaining those assets been allowed within the bankruptcy process, has the official receiver signed off on everything?
    BlewIt said:
    (Just for clarity the company would be newly formed and would be contnuation my current sole trader business)
    One thing to seriously consider is trying to get bank accounts for the newly created limited company, almost all banks will refuse to grant a business bank account to a newly formed limited company when that director/owner has only just been discharged, you will likely need to wait a year, so I would not be rushing to created a limited and transfer assets into it. 
    BlewIt said:
    Does they continue to be the property of the company. 
    If you sell the assets to the company, or transfer the assets to the company, then they are legally the property of the company. If you are the only shareholder then you own them by proxy, but you and the company are still legally separate entities and have to be treated as such. 
    BlewIt said:
    Would the trustee show an interest in them?  (They are all legitimate business assets.  Nothing hokey going on)
    Potentially, but you talk about vehicles in the plural, lots of different assets, I would be suprised if you were able to retain all those assets through the bankruptcy process, you would normally only be allowed to retain one one vehicle and assets for employment would only relate specifically to those required for continued employment, otherwise it would be easy to hide assets outside the reach of creditors. 

    Have you talked through everything with your official receiver? Do you have an accountant? 
  • BlewIt
    BlewIt Posts: 26 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Many thanks for the concise reply.

    There are assets i have been allowed to keep and some have been bought back from the trustee.

    Essentially there a van, a car, and a trailer plus some associated equipment.

    The car was sold shorty before bankruptcy due to reliability issues.  I was going to be allowed to keep it and it will need replacing in the short to mid-term.  I felt this would be better done from within a limited company.

    The van is being retained.

    The trailer was bought from the trustee but will need to be replaced shortly due age and condition.

    I hadn't appreciated there'd be issues getting a bank account for said new entity.
  • MattMattMattUK
    MattMattMattUK Posts: 11,208 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    BlewIt said:
    Many thanks for the concise reply.

    There are assets i have been allowed to keep and some have been bought back from the trustee.

    Essentially there a van, a car, and a trailer plus some associated equipment.

    The car was sold shorty before bankruptcy due to reliability issues.  I was going to be allowed to keep it and it will need replacing in the short to mid-term.  I felt this would be better done from within a limited company.
    It would only be better from within a limited company if you were looking at taking on a new car on some form of finance, which could depending on the vehicle be cheaper with low BIK payments. That being said no one is going to give a company of a recently discharged bankrupt finance so that is not going to be an option and even if it was an option it would be a very MSE option. You should look to buy something small, reliable and efficient in the short term whilst you rebuild your financial situation, rather than try to borrow again.
    BlewIt said:
    The van is being retained.

    The trailer was bought from the trustee but will need to be replaced shortly due age and condition.
    You need to look to do this without finance as that will probably not happen. There are implications if you buy it personally and transfer it to an Ltd, but again I think they are not really an option at the moment. The key question if you are looking at making a large purchase would be if it is beneficial for you to become VAT registered ahead of that purchase. Note that you can only reclaim the VAT on purely business purchases, so you could on the trailer for work, you cannot for the purchase of a car, though again a new car is not a sound financial choice and should not be the route you take.
    BlewIt said:
    I hadn't appreciated there'd be issues getting a bank account for said new entity.
    It will be an issue for a year, as would any form of borrowing (business or personal), likely for a year. I would recommend you wait at least a year before trying to migrate to a limited company. Based on you having become bankrupt I would also recommend you get a decent accountant, one who offers advice rather than just one who process your tax returns, so that you can make sure you manage things in the most efficient way going forward. They would also be able to advise you of any advantages and disadvantages of the different routes and potential timescales you might need to think about for doing things, even whether going limited makes sense at this stage, there are very slim tax benefits, but it also increases complexity and cost of accounting. 
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