Our client called us at the start of 2021 as their company was struggling with debts. They wanted to discuss all of their options regarding the company debt and understand what the best solution was for their unique situation.
The client explained to us that the loss of earnings due to COVID-19 had taken a toll on the company which had already been struggling financially. Many customers were cancelling residential jobs as they were not comfortable with tradespeople working in their homes during the pandemic. This resulted in an increase in company debts to trade creditors, van leases, and HMRC .
In 2020, the client was granted a bounce-back loan of £18,000, which they used to pay off some of the debts.
The client told us that due to the nature of their business the company’s survival was dependent on work increasing during the winter months. However, the ongoing effects of COVID-19 meant that the business was still struggling for work during this usually busy period.
Trade creditors relentlessly chased our client for payments throughout 2020. Our client became increasingly distressed by the situation. They were particularly concerned about losing the lease on the company van. Without the van, our client would not be able to accept any work at all.
The client’s business was registered to their home address and letters and calls chasing the debts were constant. Our client felt under immense pressure and the worrying situation began to have a negative impact on their well-being.
The bounce-back loan had provided temporary financial relief for the client’s business, however, a year of low income for the business had resulted in them struggling with their personal financial commitments. The company simply did not have the available funds to pay a wage.
The client approached an insolvency practitioner, but due to having minimal assets and being unable to afford liquidators’ fee’s, it became apparent this wasn’t a viable option. The client approached Future Strategy for an alternative solution.
How we helped
After completing the initial call with the client and asking questions to understand the situation in detail, we established that our client met the criteria for us to dissolve the company and it’s debts along with it. The client appointed Future Strategy to handle the dissolution.
We changed the business address to our office address and our client sent us all of the company’s creditor information for us to correspond with.
Changing the companies address to our address enabled us to manage all of company’s creditors correspondences which was a great relief to our client as it took away much of the stress from the situation.
We placed the application to dissolve the company in February 2021, communicating with all company creditors, HMRC and Companies House.
We received anticipated creditor objections that we dealt with and continued to keep the client updated throughout the process.
The company was officially struck off the Companies House register in April 2022, and all company debts were dissolved with it. Our client was relieved and grateful that the process had been managed by our expert team.