Closing Your Limited Company with Debts and Property Assets: Selling for a Clean Break
Strategic Asset Protection: Retain Property and Exit a Limited Company with Debts Without Facing Insolvency
If you’re a director looking to close your limited company while holding onto property assets, selling your company can be an option to ensure a clean break from debt liabilities. When faced with insolvency, it’s crucial to act quickly, especially if your creditors are pursuing payments. Failure to respond in time could result in them targeting your assets, including property, to recover what is owed.
Let’s explore how you can close your company by selling it, particularly if it has property assets. We’ll also explain how our corporate and finance legal team can help transfer your property into a Special Purpose Vehicle (SPV) or another incorporated company while selling your existing company to a new buyer, allowing you to exit the business without personal liability for the company’s unsecured debts.
When your limited company is struggling with debt and owns property assets, selling the business is often a far more attractive alternative to liquidation or other insolvency procedures. Instead of letting creditors come after your property to settle debts, you can sell the company to a buyer willing to take on its liabilities.
This approach offers a clean break for directors who want to walk away from the financial burden of the company while retaining ownership of valuable property assets. Here’s how it works:
- Keep your stock , assets , and cash in the company accounts
- Avoid consequences of insolvency of using a licence practitioners
- Avoid retrictions on becoming a director again
- Save your reputation
Transfer of Property Assets: First, our team of corporate and finance legal experts will help you transfer any property owned by the company into a Special Purpose Vehicle (SPV) or a newly incorporated company. This ensures that the property remains separate from the company’s debts.
- Mortgage Considerations: You will need to approach your mortgage provider to facilitate the transfer of the property into the new entity. Depending on the terms of your mortgage, there may be a need to remortgage the property under the new ownership structure.
Sale of the Company with Debts: Once your property assets are safely transferred into the SPV or new company, you can sell the existing company (which retains the debt liabilities) to a the new buyers who will take on all the outstanding debts, removing any personal liability from you as the director.
Why Selling Your Company Could be a Better Strategy for a Clean Break
Selling your company is one of the most effective ways to close a limited company with debts while protecting your property assets. Many directors facing mounting debts assume that liquidation is their only option, but this process could result in the forced sale of your property to satisfy creditors.
By selling your limited company instead, you avoid the harsh consequences of liquidation. Once the sale is complete, the buyer assumes responsibility for the company’s debts, and you can step away free of financial responsibility.
Here are some key reasons why selling your company is the ideal option:
- Debt relief: The buyer takes on the company’s debt liabilities, meaning you are no longer responsible for repayment.
- Preserving assets: By transferring property into a new company or SPV, you keep the assets safe from creditors.
- Offshore incorporation options: We help directors sell their companies to offshore incorporations, which can provide additional layers of protection against creditors and legal actions.
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