IVA or BR whith Limited Company being my home

[Jack.h]

Hello

I am going to need to do an IVA or BR, however I am Director of a limited Compnay (assets approx 18k few liabilities). To complicate matters further the Limited Company is a Pub which is our home. It is a tennancy. It breaks even on a weekly basis now, (and the business is slowly growing), but we have suffered huge losses to get to this stage.

I have some equity in a house (approx 20k now) but in a months time I will not be able to pay the mortgage (the house is sitting empty - has been on the market for 6 months) . Paying this mortgage has added to my problems. My unsecured Debts are approx 70k

Can I sell my share of the limited Company to my partner, so I become an employee only (although I will stil be the licensee)& go bankrupt & stay as licensee of the pub?

Or is there any other way that I can sort this mess out, but stay in our Pub

I also want to start a self employed sideline which pays comission only and would happily hand over all comissions earned to the OR, I am confident that I will earn from it however unfortunatly I have left it too late to start this to save the inevitable from happening

Many thanks

[Viki.W]

Hey Jack, welcome to the forum. The only bit I can help you with is the premises licence, you can't hold one if you become bankrupt, I think a personal licence is ok. I think, only think, that this is the same for an IVA.

Please wait for an expert to advise you on your situation. You are in a great place for good advice and support, hang in there. Viki X

[ianmillington]

Viki is absolutely right. A personal license is unaffected by a bankruptcy/IVA but either will cause a premises license to lapse. Thus if you hold the premises license you will need to get that transferred before you pull any triggers.

You can sell the shares in the company to your wife, but you will need to get a professional valuation of the company before you do so as otherwise you could subsequently have the OR arguing a transaction at an undervalue. Is there anything in the company's agreement with the brewery that prevents a change of ownership of the company? Also, I note the company is the tenant. Have you personally guaranteed the company's obligations under the lease?

Ian

[Jack.h]

Thanks Viki, I hadn't even thought about the affect on my lioense. Think it wont be a problem as there are 2 of us.

Thanks again
Jack

[Jack.h]

Yes we have personally guaranteed all obligations to the Landlord, which are rent/service charge & all drink purchases.

They would not be bothered about change of ownership they are only concerned with getting paid & i don't think they have ever recognised that we are a limited company - they just invoice us as individuals.

I think the OR would see it as an undervalue becuase I was planning on selling my share for £1 !!

Any other way round this? Can i step down as Director but keep the share holding- would the OR not alow me to keep the Company as it is the only income & roof over my head?

jack

[ianmillington]

I think you need to chat this through with an IP or a lawyer on a confidential basis, Jack. At a face to face meeting preferably, with both you and your wife there. There is some pretty serious planning that needs to be done before you do anything if you ask me, as you need a very robust game-plan.

Ian

[jpj]

Perhaps you should think about renting the house out!!?? 6 months is a long time to leave a house standing empty and paying a mortgage on it! With the property market so dead and rental prices rising it could be your best option!

[Jack.h]

We did have the house rented out, but realised we needed to sell to release the equity - our tenents were going to buy at first - they dragged it out then changed their minds & left. We would have been able to clear more than half the debt at this point. The Estate Agent advised it would be easier to sell empty. We are now on the third offer - and with house prices plumeting it looks like I will get nothing much after Estate Agents fees & Solicitors costs. If we rented it out now I doubt we could cover the mortgage & secured loan & then there is still the problem of the credit card debts. I doubt an IVA or BR would allow us to keep a let property with approx 20k equity.

Or would they?