voluntary insolvency

[bethsmum]

my husband worked for his small family company,along with his sister in law for over 25 years,after his father passing away,and his mum choosing to retire(who both owned the buisness) the company was handed to my husband,his brother,and his brothers wife..after trading for a further 18 months it became obvious that the company was struggling,(money wasnt being paid to them quick enough,for them to pay their suppliers) they decieded to fold the company rather than be forced to go bankrupt,they own the company warehouse outright and were counting on the sale of this to pay all their creditors,we have someone who wants to buy the warehouse but is struggling to obtain the funds in todays climate,all this happened in sept 2007...today we received letters in the post from a company who are now dealing wilth this matter..my husband is panicking thinking that he might be liable personally for some of these debts if the warehouse doesnt sell,or we dont get for it what we need to clear the debts.....the company was a limited company so we allways thought that if something happened like this they couldnt take any money or assets of us personally....
i hope someone out there can give us some advice....

[buildersmate]

I assume that he both a director and a shareholder.
Shareholders are liable to the extent of the issued capital in the company - so no on that front. He loses his stake in the business.
Directors have certain responsibilities including not trading fraudulently or if the net liabilities exceed the net assets - unlikely to be the case on that front.

[Skyline D]

It's fairly common also for directors to give personal guarantees towards company banking. On balance at least half of my company clients are in that position.

If your husband never did so then he won't have a problem as buildersmate says (provided you are correct in saying the company is solvent). If he did then of course the bank (or anyone else who might have received a personal guarantee) could well pursue for debts.

[Lewistone]

Thhe trading business was a Limited Company and unless there is something you have not divulged no liability would fall om the owners of the business personally

The Company would appear to be a tenant of the WarehouseThere are two ways a Company can be voluntarily be wound up one a members petition but only if it's assets exceed liabilities (not the case) Second a Creditors Winding up
If the Warehouse is not mortgaged in anyway to secure the Companies debts then the owners can proceed to dispose of it
I could not advise your husband to put any more money into the Company the whole purpose of a limited company is avoid peronal liability
I am assuming that aWinding up Order has been made against the Comany with the Official Receiver appointed as Trustee and he has delegated the position to a firm of accountants am I correct
They in turn will seek a meeting with the Directors to obtain
financial position of the company
does this reply help
Lewistone