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HI - I'm looking for some help:
In summary - I set up a private limited company for a small charity venture I ran for my local area. The venture ran for 3 years and with max profits in our final year of £900 but overall losses after the 3 year period of £9,000. The venture didn't work and we retired it.
In connection with the venture, I had taken out a card payment machine. We had various issues with this card payment machine (including the fact it hadn't worked for several months) - I contacted the card machine company to raise a complaint and instead the advisor moved me to a cheaper machine that should work with no issue. I went from paying c.£65 a month to c.£20 a month. Before signing the agreement, I noted it was a 5 year contract and raised this with the advisor stating I didn't want to be tied in for that long. He said it didn't matter as I'd previously advised that I would be looking to wind the company up after the final year and they couldn't pursue dissolved companies. I'd also point out that I never ended up raising a formal dispute/received any form of refund or compensation for the several months where I'd been paying for a machine that didn't work - we were a seasonal venture and it hadn't affected us save for paying for a service that didn't work plus the card machine company had been fair to us historically and so I left it.
Fast forward, we have completely abandoned the venture but wanted to retain the legal entity so that we could take advantage of the losses for tax purposes in case we started a new venture. I contacted the card machine company and explained this and asked to terminate my contract - they pointed out that it was a 5 year contract and this couldn't be done and I said "I pointed this out before signing and was told it shouldn't be an issue, please listen to the call recording". The card machine comapny listened to the recording and replied to say I was advised it was only not an issue if the company was dissolved - as I wasn't dissolving the company, they couldn't terminate the contract and would continue to chase me for outstanding debts/we'd keep accruing monthly payments. Several months with radio silence until I was contacted by the card machine company seeking the return of my card machine - I said I was more than happy to arrange collection and this was all sorted with no issue or discussion of termination charges. Later that day I was surprised to receive an invoice for £650 allegedly for termination of the contract, payment of the full term plus penalties and, after contacting the card machine company again, have been told that they only won't pursue this debt if I dissolve the company.
I've looked into dissolving the company and from the advice online, it looks like it would have to be the CVL route and I'd need to declare that the company is bankrupt (which it is) but then it says I have to appoint a liquidator - my issues/questions are:
- do I really need a liquidator - as noted above, this company has losses of £9k and only ever achieved profits in one year of £900. There are no assets and no debts/disputes save for with the card machine company. Appointing a liquidator feels heavy handed;
- if appointing a liquidator, will I need to pay for this personally as sole director given the company has no assets - I've seen suggestions online that this will cost £3-7k for a small business and so, if this is correct, I may as well settle the £650 debt personally and carry out an MVL;
- will anyone care for such a small company and can I just file a DS01 without following the formal process - my concern with this route is it could have consequences for my personal job if I'm struck off as a director, even for a small venture like this, and I'm the sole director having (foolishly now I've researched it) agreeing to sort this out for our small group;
- where do I stand with the card machine company - they've told me they'll only stop chasing for a debt which I think has been unfairly accrued if I wind up the company - isn't this harassment/some form of bullying behaviour? Also, if I wind up the company and provide them notice (as required) they'll surely just object and insist it remains on the register on the basis there is an outstanding debt? I also have a counter claim for the period where I had a card machine that didn't work and it feels like I was misold the new contract on the basis that I could just dissolve the company and they wouldn't chase the debt which now seems to be untrue because I can't just wind up a company with an outstanding debt?! I feel like I'm just being bullied/harrassed and have no control over the situation;
finally - is there anything I can do to preserve the £9k losses that we were hoping to use for tax relief?
Sorry - I know these are small trivial numbers but that's partly why I'm confused as to the process to follow - surely there should be a route for dissolving small companies like ours?
In summary - I set up a private limited company for a small charity venture I ran for my local area. The venture ran for 3 years and with max profits in our final year of £900 but overall losses after the 3 year period of £9,000. The venture didn't work and we retired it.
In connection with the venture, I had taken out a card payment machine. We had various issues with this card payment machine (including the fact it hadn't worked for several months) - I contacted the card machine company to raise a complaint and instead the advisor moved me to a cheaper machine that should work with no issue. I went from paying c.£65 a month to c.£20 a month. Before signing the agreement, I noted it was a 5 year contract and raised this with the advisor stating I didn't want to be tied in for that long. He said it didn't matter as I'd previously advised that I would be looking to wind the company up after the final year and they couldn't pursue dissolved companies. I'd also point out that I never ended up raising a formal dispute/received any form of refund or compensation for the several months where I'd been paying for a machine that didn't work - we were a seasonal venture and it hadn't affected us save for paying for a service that didn't work plus the card machine company had been fair to us historically and so I left it.
Fast forward, we have completely abandoned the venture but wanted to retain the legal entity so that we could take advantage of the losses for tax purposes in case we started a new venture. I contacted the card machine company and explained this and asked to terminate my contract - they pointed out that it was a 5 year contract and this couldn't be done and I said "I pointed this out before signing and was told it shouldn't be an issue, please listen to the call recording". The card machine comapny listened to the recording and replied to say I was advised it was only not an issue if the company was dissolved - as I wasn't dissolving the company, they couldn't terminate the contract and would continue to chase me for outstanding debts/we'd keep accruing monthly payments. Several months with radio silence until I was contacted by the card machine company seeking the return of my card machine - I said I was more than happy to arrange collection and this was all sorted with no issue or discussion of termination charges. Later that day I was surprised to receive an invoice for £650 allegedly for termination of the contract, payment of the full term plus penalties and, after contacting the card machine company again, have been told that they only won't pursue this debt if I dissolve the company.
I've looked into dissolving the company and from the advice online, it looks like it would have to be the CVL route and I'd need to declare that the company is bankrupt (which it is) but then it says I have to appoint a liquidator - my issues/questions are:
- do I really need a liquidator - as noted above, this company has losses of £9k and only ever achieved profits in one year of £900. There are no assets and no debts/disputes save for with the card machine company. Appointing a liquidator feels heavy handed;
- if appointing a liquidator, will I need to pay for this personally as sole director given the company has no assets - I've seen suggestions online that this will cost £3-7k for a small business and so, if this is correct, I may as well settle the £650 debt personally and carry out an MVL;
- will anyone care for such a small company and can I just file a DS01 without following the formal process - my concern with this route is it could have consequences for my personal job if I'm struck off as a director, even for a small venture like this, and I'm the sole director having (foolishly now I've researched it) agreeing to sort this out for our small group;
- where do I stand with the card machine company - they've told me they'll only stop chasing for a debt which I think has been unfairly accrued if I wind up the company - isn't this harassment/some form of bullying behaviour? Also, if I wind up the company and provide them notice (as required) they'll surely just object and insist it remains on the register on the basis there is an outstanding debt? I also have a counter claim for the period where I had a card machine that didn't work and it feels like I was misold the new contract on the basis that I could just dissolve the company and they wouldn't chase the debt which now seems to be untrue because I can't just wind up a company with an outstanding debt?! I feel like I'm just being bullied/harrassed and have no control over the situation;
finally - is there anything I can do to preserve the £9k losses that we were hoping to use for tax relief?
Sorry - I know these are small trivial numbers but that's partly why I'm confused as to the process to follow - surely there should be a route for dissolving small companies like ours?
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