Do assets belong to me personally or my company?
Within a limited company, anything that is bought by the company belongs to the company and anything bought by you, the director, belongs to you personally. A limited company is classed as a separate legal entity to the associated directors and shareholders.
If you operate your business as a sole trader, you have unlimited liability, which means there is no legal separation from you as an individual to your business.
What are limited company assets?
Limited company assets are those purchased by the company, for the company use. Essentially, a limited company asset is anything purchased by the company, or owed by the company. Company assets are typically broken down into different categories and subcategories. They can be identified as either tangible or intangible:
- Tangible assets
These are physical assets which include property, equipment, vehicles and machinery, anything that you can physically touch or see. - Intangible assets
These are assets which can’t physically see or touch and are typically harder to value. Brand reputation, goodwill, intellectual property.
Limited company assets can then be further subdivided into those that convert quickly into cash – normally within 12 months and these are called current assets, fixed assets can’t be so easily converted into cash.
- Current assets
Anything from short term investments, cash at bank, inventory, deposit accounts - Fixed assets
These are long-term investments, land and plant.
What is the difference between personal assets and assets that belong to the company?
The structure of a limited company means that your company is considered a separate legal entity to you, the director. This means any assets that the company owns, should be registered to the company and be on the company’s books. Personal assets are purely associated to you and because of limited liability, they cannot be intertwined.
Can I transfer assets to myself?
It’s not uncommon for directors to transfer limited company assets to and from a company to their own personal ownership. However, when doing so, the value of the assets in question need to be taken into account and they must be transferred at full market value. You could not buy an asset below market value as it would be deemed a transaction at an undervalue.
Assets need to be itemised on an invoice prior to any transfers and personal and company bank accounts then need to be updated accordingly. The company’s books should then be updated accordingly showing that any transfer of assets has been done in the proper manner.
What happens to my assets if I close my limited company
When you close a limited company, the assets within the business are sold with any cash raised used to be distributed. The nature of how this cash is used will be determined by whether you are going through a solvent or insolvent liquidation.
Find out more about closing a limited companyWhat happens if bailiffs try to recover assets?
Bailiffs are often sent to collect company assets after a creditor has issued a County Court Judgement (CCJ) and have still not received their payment. They cannot collect any personal assets and can only collect assets that belong to the company. A director should be able to prove which assets belong to themselves and which belong to the company.
Find out more about what bailiffs can take hereHow our services can help you
If your company is struggling financial and you’re concerned about bailiffs coming to collect assets, or you’re worried about which assets you may, or may not be able to keep during liquidation, we can provide you with free confidential advice. We can help advise you on which assets are your own and which belong to the company, we can also help you understand your financial situation and guide you on the best process available to your company.
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a payment plan between a company and its creditors that allows you to restructure your company’s unsecured debts, while continuing to trade, by making affordable monthly payments over a fixed period. We start by assessing your company’s financial position, determining a realistic repayment amount. These terms are then proposed to your creditors and if approved, your company enters the repayment plan. When in place, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The process lasts for up to 5 years and on successful completion, any remaining unsecured debt in the arrangement is written off.
- Restructure your company through administration
Administration is an insolvency procedure for companies. Entering the procedure, your company will be in a temporary state of protection by a moratorium that halts creditor action, including legal proceedings, giving your company the breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner, more profitable organisation. If rescuing the company isn’t a viable option we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
- Close your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your company, ceasing its trading operations, realising any assets, and removing the threat of creditor legal action. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed, your company’s unsecured debt will be written off and the company is dissolved, allowing you, the director, to move on.
- Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The company name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
- Close and liquidate your solvent company via a Members Voluntary Liquidation (MVL)
An MVL is the liquidation and closure of a solvent company. The procedure will formally wind up and close your company, whilst extracting the company’s maximum value, through its various tax benefits. The company’s assets, including any premises, are realised, with the remaining funds distributed to shareholders once creditors are satisfied.
How to get in touch with us: The next steps for engagement
- Speak with our initial advisers
Make contact with our team, via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems. - Formally engage with Wilson Field
If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.
In summary
Assets bought by a company legally belongs to that company. Any assets bought personally by you, whether for company use or personal use, legally belong to you. When a limited company enters into a solvent or insolvent liquidation, its assets will be sold as part of the process. During an insolvent liquidation, they will be used to cover the costs of the insolvency practitioner before then being distributed amongst the creditors. Through the process of an insolvent liquidation, the assets will be sold with the cash being distributed amongst the shareholders.
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