What are the implications of a ltd company closing

[ellywellywoo]

If a small ltd company needs to stop running ie close down as its loosing money and running into debt what are the implications of this.

There are creditors to pay and their is an overdraft with the bank. This is personally guaranteed but this can be paid off but the other debts cant. Also there is a vat bill to pay to pay in June.

Thanks

[anniebird]

This is a complicated issue and you would probably be better off taking advice from your accountant but here are a few points.

You can put the company into administration so that the administrator (not you) will run the company. From what you say they will probably sack any staff as soon as possible - dispose of all assets and distribute any amounts left over in order to clear the debts.

As you have personally guaranteed the overdraft the bank will probably expect you to pay this off in full so that all monies raised by the administrator can be used to clear other debts. If there is any money left after all debts have been paid it would be paid to you.

It is best to start the process as quickly as possible so that problems do not get any worse.