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Need advice re closing a small business.

(6 Posts)
ByeByeBusiness Tue 18-Feb-14 14:11:25

it's a limited company and my main worry is that I have signed for 2 contracts with advertisers. They cost monthly over £100 and I have been making the payments from my own money. I can't afford to do that anymore sad. This is not my main source of income, well it's no source of income. How do I go about closing the business when I signed for those contracts?

Sorry, hope it's making sense.

prh47bridge Tue 18-Feb-14 15:26:04

If the contract for the advertising is with the business it is not an issue. The business owes the money, not you. They can't come after you just because the business is unable to pay.

If the contract is with you personally I'm afraid you will still owe the money even after you close the business. You will have to see if there is any way you can cancel the contracts.

ByeByeBusiness Tue 18-Feb-14 15:40:45

Hi prh all the contracts are in the business's name. Last year I stupidly followed the advice that if you're turnover is dwindling, you should not cut but increase your marketing spending.

ByeByeBusiness Tue 18-Feb-14 15:42:01

So now I have those shiny adverts plus some other marketing gimmick and it's bleeding me dry. Do I need to outsource a liquidator confused?

prh47bridge Tue 18-Feb-14 17:30:12

As the contracts are in the business's name you are not liable for the debt.

You will need to engage an insolvency practitioner to act as liquidator. The liquidator will sort out distributing any assets of the business to the creditors. The company pays their fees. If the company is unable to meet its debts the official receiver (an official working for the government's Insolvency Service) will take on the role of liquidator. There is a lot of guidance on the Companies House website here.

LauraBridges Thu 20-Feb-14 11:07:27

Also read the contracts. What do they say about termination? Eg it may say you can give a month's notice to end them at any time or that if they do not generate leads you have a right to terminate immediately.

If you can stop the business solvently with no claims and everyone paid off you don't need to go an insolvency route and can just apply to Companies House to have it struck off after something like 6 months of not trading with no claims or tax due.

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