Directly dissolve your BV with debts?
Dissolving with debts is indeed possible. See if your BV is suitable for immediate dissolution.
Normally, a private limited company with negative equity in the form of debt has two options when the board decides to dissolve. The BV can be declared bankrupt with all its consequences or you can dissolve the BV by means of a (turbo) liquidation. Indeed, in some cases, the court will even rule that a turbo liquidation is a better option than bankruptcy.
What forms of debt are there?
Looking at a BV’s balance sheet, we usually see three types of charges that are an obstacle to proceeding with a turboliquidation. These are debts to private, debts to third parties and debts to the tax authorities.
Debts to private occur when the private limited company borrows money from an individual. This is in most cases the DGA or one of the shareholders. This does not pose a problem in almost any situation when it comes to liquidating a private limited company.
It is advisable to draw up a waiver agreement that legally establishes that the debt is waived. This will avoid potential problems if the BV is later declared bankrupt.
To third parties
Debts to third parties come in many shapes and sizes. From loans with a bank to outstanding invoices with suppliers, telephone subscriptions or rental contracts. Here, you can turboliquidate a BV but to avoid problems with these creditors, it is advisable to present the situation to them. The best thing would be to agree a payment schedule with these creditors, treating all creditors equally. Should this fail, you can still follow a turbol iquidation procedure, but be aware that creditors may be able to hold you liable in the event of mismanagement and if the BV has made selective payments to creditors. A turboliquidation is preferable to filing for your own bankruptcy. The court even discourages filing your own bankruptcy if there are no assets in the BV, you can then even be held liable for the trustee’s costs if you have no assets, as you should have followed a turbo liquidation. So it is very important in a turbo liquidation that there are no assets or assets in the BV or an expected gain.
Liquidating without discussing your situation with your creditors is possible, but entails the necessary risks. Also, if after the dissolution of a BV it turns out that there are still outstanding debts that were not included in the original liquidation, the court can, at the request of a creditor, decide to reopen the liquidation of the BV. In this case, you are usually much further from home and the costs of a dissolution increase significantly. Creditors can also file for bankruptcy of your BV with the court after a dissolution.
Tip: also make sure that you have filed the annual accounts of the BV on time, this prevents misery in case of a possible bankruptcy, due to the legal presumption of improper management in case of not filing your annual accounts on time or not at all.
One way to be more sure (not sure!) of avoiding a trip to court by creditors is to initiate a normal liquidation procedure instead of a turboliquidation. This gives interested parties and creditors 2 months (opposition period) to come forward if the liquidation is involved. After this period, the BV can be dissolved and the court will be more lenient in its judgement if creditors still come forward after these two months.
To the tax authorities
They can’t make it any more fun, but they can make it easier. If you owe debts to the Tax Office, you can still wind up your BV. In some cases, the Tax Office is willing to make a settlement. Of course, you can always approach the Tax Office to see if they are willing to settle.
May I liquidate my PLC if I have a debt?
We can give a short answer to this question: yes. But beware, debts are debts for a reason and do not disappear by themselves. Even after a BV is dissolved, the possibility of management liability remains and improper management is punished. Do you want to make sure your BV is dissolved properly? Then contact us for a no-obligation consultation. Dissolve your BV online, click here. Any questions or comments? Leave a message below!