It is possible to dissolve a company with a bounce back loan, however, it’s highly likely that as the debt is unsecured, the dissolution would be objected to. To close a company with an outstanding bounce back loan, it should go through the correct liquidation procedure of a creditors voluntary liquidation.
Criteria for dissolving your company
Dissolving a limited company is used for companies that have no outstanding debt, or money and simply want to strike the company off from Companies House. A company can only be struck off if:
- It hasn’t traded or sold off any stock in the last 3 months.
- It hasn’t changed any names within the last 3 months.
- It isn’t threatened with liquidation or has any repayment agreements with creditors.
What happens if you dissolve a company with a bounce back loan?
If you try and dissolve a company with a bounce back loan, or any other debts for that matter, it’s likely that it will be objected to, which is known as ‘Objection to Company Strike Off Notice’. When applying for a strike-off, it will first be advertised in the London Gazette, which will notify creditors of their chance to object. As a director, you would also have to write to any outstanding creditors, including HMRC of your intentions to dissolve the company and have it struck from Companies House.
How we can help
If your company is facing financial difficulties and you’re worried about an unpaid bounce back loan it’s important that act quickly. We provide free, confidential advice and can help you look through the options that are available to your company.
Closing a limited company with a bounce back loan?
A company with a bounce back loan can be closed down, as a bounce back loan is classed as a debt just like any other. Although they don’t have a personal guarantee as part of them, it does not change anything else. A limited company with a bounce back loan has to be closed down in the right way, which does not mean striking it off.
Creditors Voluntary Liquidation
To close a limited company with a bounce, you will need to proceed in the correct way through the process of a Creditors Voluntary Liquidation. We are licensed insolvency practitioners and can assess your situation and put your company through the correct procedure.
- Speak with our initial advisers through phone or online chat.
- After an initial assessment, we will identify if your company is viable for liquidation.
- We will propose to you the liquidation of your company and undertake the necessary steps.
All advice is free of charge and if a liquidation is viable it will result in the formal closure of your company, and any unsecured debts will be written off.See more on how Creditors Voluntary Liquidations work here
A company with a bounce back loan should not be liquidated through a dissolution. A dissolution is reserved for companies that have stopped trading, have no money left in the company and have no unpaid debts. A company with an unpaid bounce back loan, should go through the proper procedure of a creditors voluntary liquidation in order to close its doors.
Book a free telephone consultation with one of our initial advisers