Originally written by David Tattersall on Small Business
Can I liquidate my company if I have a Bounce Back Loan?
As a company director, neglecting creditor interests will instantly land you in the firing line of an insolvency service investigation into director conduct when entering company liquidation. Taking the informal company closure route by striking off your business, also known as dissolution, is a route designed for businesses laden with no company debts. Therefore, investigations into director conduct are not conducted as standard during company strike off.
A new legislative measure preventing company directors from informally closing their business to avoid an investigation into director conduct, instead of entering a formal insolvency process, is due to come into play. The first reading in Parliament recently took place and the measure appears to come into force in late 2021.
As Bounce Back Loan repayments fall due following the optional pause on repayments, company directors will need to brace company cash flow for additional outgoings. Currently, if this route is pursued by your limited company with an outstanding Bounce Back Loan, rather than a formal insolvency route, you will likely receive an “Objection to Company Strike Off Notice”. After the rules are approved, this will ring

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