Callers often think that Liquidation is the only solution available when they are in debt. The whole point of the initial consultation is we have a duty of care to make sure that Liquidation is the right solution for you. Don is a case in point, Liquidation was certainly not the best option, although he though it was his only was out.
My last but one client telephoned me to tell they were terminating their contract. I had lost 10 clients in 3 months, it truly was my worse time in business since I had begun. Financially I was at the end of my tether, I had £3,000 in my account, and I knew VAT wanted £8,000 from me. I could see little option but to Liquidate.
Things had gone so well since I’d started my consultancy business. I’d had a steady flow of work. From day 1 I paid all my bills bang on time.
Two years before everything came crashing down I had even taken on 2 members of staff, things had really been looking up. I knew they wouldn’t pay for themselves immediately, but in a few years I dreamed off going into semi-retirement.
I made a slow journey home after that phone call. I needed to sleep on things to decide what to do.
I had a new contract starting in 3 months, I knew it wasn’t now, but I only owed £8,000, I thought the Inland Revenue would be willing to do a deal.
I couldn’t believe it when they refused the payment plan. It was only £8,000 and they only had to wait 3 months, but apparently because a new VAT payment would be due then, they wouldn’t entertain it.
I decided Liquidation was the way forward. I contacted Zennet Solutions on the recommendation of a friend who had used them. We must have been on the phone for an hour or two discussing the ins and outs of the business.
I was amazed when they suggested that maybe Liquidation wasn’t the right solution for me.
They suggested that we make a one off settlement offer to HMRC to clear the debt and then dissolve the company. I had never even heard of dissolution.
I spent the day researching dissolution, according to Companies House I could dissolve the company myself, but when I looked into I thought I would probably just make things worse. I decide then to go back to Zennet Solutions.
It took a few weeks but Zennet Solutions managed to get HMRC to take the settlement offer, why they would take that and not wait for 3 months I have no idea, madness.
The actual dissolution took 3 months, but seemed to fairly hassle free, although Zennet may have had to do a lot behind the scenes I knew nothing of.
Looking back, I think dissolution was a much better option for me than Liquidation, and it worked out better for HMRC as well. No wonder Liquidators don’t like people knowing about dissolution, they are the only ones that lose out!