Director Advice
Understanding IR35 and what to do if you need to close your company
Sweeping changes HMRC made to IR35 legislation in 2021 to reduce tax avoidance have adversely affected many contractors and left them with little choice but to close their companies.
How to improve company cash flow
Company cash flow, or the lack of it, is the most common cause of limited company failure in the UK. When the cash in the business becomes squeezed, it becomes difficult to pay your debts on time, order raw materials, pay staff, fund marketing campaigns and operate effectively.
How to close a company with no money
If your company has no money and you’re ready to close it down, you might be unsure of your options. Voluntary Dissolution, also known as Strike Off, is the cheapest way to close a limited company, but it’s only appropriate for businesses that are solvent (can repay all their debts).
What is limited liability for a UK company?
When you run a business, one of the first and most important considerations is its legal structure. In the UK, there are three main business structures for SMEs - sole proprietorships, partnerships and limited companies.
Can directors be held liable for company debts?
In the main, the limited company legal structure protects directors from personal liability in relation to business debts.
Director disputes – when one wants to liquidate and one doesn’t – what next?
If you are in serious dispute with a co-director – maybe you have strongly disagreed on a matter of business, for example, or are a divorcing couple - you may want to liquidate the company and move on.
I cannot afford to pay my staff’s wages
If you’re unable to pay your staff then it’s also likely that you’re struggling to pay bills from suppliers, HMRC and other creditors when they become due, and at that point, your business could be technically insolvent.
My business is suffering due to depression/ill health
If the stresses and strains of running a successful company have taken their toll on your physical or mental health, it might be time to step back.
Understanding commercial leases and personal guarantees
Given the complexity of many commercial leases, it is vital that you understand your rights when it comes to signing a personal guarantee for a lease. The ramifications of failing to meet lease repayments are serious, but knowing the consequences to you personally if your business starts to struggle financially, could help to protect your home and other assets.
Joint and Several Liability Notices: Directors of insolvent companies face greater personal exposure to tax liabilities
While company directors are generally protected by limited liability, recovery powers granted to HMRC in the Finance Act 2020 mean directors can face greater personal liability for tax debts held by the company in the event of insolvency.
Can I resign as a company director?
If you are thinking of resigning as a company director, there are specific steps you and the company must take.
What happens to company assets when a business is wound-up?
As part of the process of winding up a limited company, all of its assets will be liquidated, that is sold to realise as much money as possible.
Understanding a company director’s fiduciary duties and consequences of failing these duties
Your fiduciary duties as a director reflect a relationship of trust and loyalty between yourself, the company, its members, and stakeholders. The expectation is that you will act in good faith, and in the best interests of the company.
What happens to debts when a company is dissolved?
Dissolution is not an appropriate solution for striking off (dissolving) a company with debts. Liquidation is recommended for several important reasons.
