Friday, February 22, 2008
More homeowners in debt trouble
More homeowners in debt trouble
Concerns over debt levels are rising
Mortgage repossession orders during the past three months in England and Wales were up 66% on a year ago to nearly 20,000, official figures have shown.
Repossession orders have been on the increase since early 2004.
The figures show the total number of homeowners being taken to court by lenders pursuing mortgage debt rose 55% to nearly 30,000.
The Department for Constitutional Affairs figures will add to concerns about debt and the housing market.
"The increase in mortgage possessions fits with the slowdown in house price inflation," Alan Clarke, UK economist at BNP Paribas, said.
"The conclusion is there are still signs of financial stress among homeowners," he added.
Lower than average
In July, the Council for Mortgage Lenders (CML) said there were 4,640 homes repossessed during the first half of 2005 compared with 3,070 for the previous six months.
Lenders have blamed rising repossessions on five interest rate rises between November 2003 and August 2004.
In August this year, UK interest rates were cut by the Bank of England's Monetary Policy Committee from 4.75% to 4.5%.
The CML has predicted that more than 10,000 homes will be repossessed by the end of the year.
However, repossessions are still set to be much lower than the long-term average of 30,000, or the peak of 70,000 a year recorded during the early 1990s property market crash.
Enforcement
It does not automatically follow that repossession orders, as recorded by the Department for Constitutional Affairs, result in actual repossession.
Generally, the number of court repossession orders is far higher than actual repossessions because often the borrower agrees to pay or a deal is made so the order is not enforced.
A lender may also obtain more than one order for each property if a previous order has lapsed.
What do you think about these figures? Have you experienced home repossession? Do you know anyone who has? What should be done about this problem?
Your comments:
My wife and I live in a small two-bed starter property and we need to move to a lager property due to a new arrival this year, we cannot move up the property ladder because of the massive price difference between the two and three bedroom houses. We are hoping for a housing market crash so we can move on.
Steve, Boston
Perhaps the Government should consider setting a cap on rents for certain areas of the country. This would discourage greedy landlords buying up multiple properties and then charging extortionate rents for those that can least afford it. We need realistic rents in this country so that people have a real choice on whether to buy or rent. Greedy landlords aren't helping anyone but themselves and the loan companies.
Paul McDonald, Welwyn Garden City, UK
As a young teacher (married with two small children) buying a house big enough for a family of four, is completely out of the question. Even in years to come my wages will not be sufficient to cover a mortgage. In fact currently we qualify for some housing benefit for our two bed house... I can not even afford to rent a bigger place, whilst earning a reasonable wage! We are now planning to immigrate as soon as possible to enable us the live in a house big enough for all of us! No easy choice¿ the thought of leaving our home country makes us all very sad...
Kai, Derby, Derbyshire
It makes me laugh so many people out there looking to blame someone else rather than taking responsibility of their own actions. I agree there should be some sort of 'cap' on the amount borrowed which would have helped control house prices / debt over the years but there wasn't. Ultimately the responsibility lies with the person signing the contract; a simple question of can we actually afford this on our income needs to be asked. As for the guy who said the lender should be liable for any amounts borrowed over 3 x salary....what a joke, maybe he should learn to say no!
Ian, Kent
With my wife we are about to complete on our first house. If it wasn't for the help of family members who made it possible for us to have a 30% deposit, we would have never made it. We are higher rate tax payers and the repayments will be a bit higher than the rent, but manageable. I think people need to take more responsibility for their actions and stop blaming others (banks, government, advisers) We saved as much as we could for four years and now we can get on the ladder.
Juan C, Surrey, UK
First and foremost, people must take responsibility for their own actions rather than blame others, which seem ever more the case. Property prices have gone up as much as they have because we, the purchasers, are willing to pay. Like it or not, as new building land in the UK becomes rarer, property can only get more expensive. If people wish to own property they need to work for it, with both partners working full time, and save for it, cutting out the unnecessary luxuries. If that's too much too ask, its not the governments fault.
Max, Bury St Edmunds, Suffolk
House prices are at unsustainable levels due to a combination of cheap debt, lax lending, and people's naivety thinking markets only go up. Buy-to-let investors have kept the market propped up until now, they are fast disappearing. Government is scared of a house crash hence their ill advised SIPP legislation attempting to prop up the creaking edifice a while longer- just delaying the inevitable.
Andy, Richmond, Surrey
I left England and bought a house in Germany. It is an accepted fact here that as your house becomes older the price is likely to depreciate or hopefully retain the same value. Of course the same city centre prices apply here as well but the market as a whole is more stable and government tax breaks still exist.
Mike James, Langenfeld, Germany
I think the real problem stems from how easy it is to re-mortgage your home. We did it in the past and we paid off credit cards, etc. and had a really good holiday that year. We didn't address the real issue until recently, that we weren't using our credit wisely. We straightened ourselves out and life is much better now. I truly don't think this is about first time mortgages but what happens when a remortgage kicks in.
Val, USA
I have saved very hard and had some very well paid jobs (above the national average) yet I am not able to purchase a property unless I moved out of London. Then I have the inconvenience of a long journey and all the risks that presents compounded by high transport costs. It is very difficult as a single person to get on the property ladder relying on a salary only. I have a good deposit but alas it is still inadequate unless I double my salary and take out a 30 year plus loan.
Jo, London
Most other countries have borrowed to prop up the economy. This government has preferred to encourage individuals to borrow instead, to fuel consumer spending and the economy. As the consumer credit levels reach their maximum, the harsh reality of this error will effect not just the country but also all businesses and individuals. This is going to get nastier yet.
Graham Found, Banwell, North Somerset
House prices are ludicrously high, and this will not improve when the government gives tax breaks for wealthy people to put homes into their pension schemes at the expense of normal people who just want a home. However, people do also have elevated expectations for their lifestyles - designer-label clothes and cars and so on - which can't help them to reduce their debt. It's hard to apportion blame in such a silly situation but the government needs to do something (if only to abandon its pension tax-break plan) if we are not to see a lot of families without proper homes in the future.
David, Surrey
I earn just over 40,000 GBP a year, but cannot afford to buy a house. Because of earlier financial difficulties we didn't buy a house when we should have, and now have 2 kids. A three bedroom house, even in a poor area in town, is 150,000 pounds which is more than three and half times my income and a lot of money to repay each month as a mortgage. It seems crazy that property prices have reached the point where people paying the higher rate of tax cannot afford to get on the property ladder.
Ian Matthews, Shrewsbury, UK
I work for a financial institution that takes responsible lending seriously. Unfortunately, too many institutions are so driven by their own sales/growth targets and the problems faced by increasing house prices that they have relaxed their lending policies to enable people to borrow far more than they would have been able to over latter years. A number of people probably haven't worked out how much of an increase in monthly commitments a 1%, 2% hike in base rate makes. Ultimately, the borrower must take full responsibility for their commitment, but I believe that the lenders have a duty to lend responsibly based on their income.
Gareth, Swansea
I am an independent financial adviser and I'll accept that it is difficult for first time buyers to get on the property ladder. However, I don't often see first time buyers sacrificing any luxuries or modifying their lifestyles to save for their deposit. Is it peer pressure, lack of guidance from parents or a general lack of understanding of debt that makes this the case? I don't know! In general people need to be more responsible for their own actions and not blame the banks, the government or the advisers for what is often a self generated problem.
Neil Burton, Tunbridge Wells, Kent
I had 14 different credit cards three years ago totalling £114,000! Obviously I couldn't cope with the repayments and got a Trust Deed. This helped to get my finances back in order and three years later I am much more credit savvy. But, the finance companies and banks etc keep offering more and more credit. They have to stop or be stopped by government legislation. No-one should have more debt than, say, three times their earnings (including mortgage ). If someone lends a person over and above this level, then the lender should be liable! The number of people who are really struggling is way above the estimates from the government who don't want to admit to the problem. Pete, Hamilton, Scotland
I find it laughable that the lenders blame interest rate rises. They know better than anybody that 4.75% is still a historically low rate. Surely anybody taking out a mortgage should ensure they can afford at least a 2% rise in interest rates. I think we all know that high house prices are the problem here but the housing industry dare not admit it as their profits are at stake.
Andy, Beds
I think people should start to take responsibility for there own actions. No estate agent or bank person was there holding a gun to there head forcing them to take a mortgage that they could not pay for. These people get themselves in to debt buy maxing out all available credit then when the interest goes up they can no longer service the debt and are all surprised by this.
Christopher, Canada
Thank goodness that we are beginning to face up to our financial responsibilities. My son and his partner were able to borrow a horrific sum of money to buy a new house and are struggling to make ends meet. How many others are in a similar position but are simply too embarrassed to admit it?
Betty Middleton, Lancaster
We have become too focused on home ownership. I would be content to rent if the rent I paid was affordable (but I would be hard pushed to find as nice a home to live in the in the private rented sector for the same amount my mortgage costs me) and if I felt I could stay there with some security and a landlord that kept the house up to a high standard. But that's not the way we are set up to live in the UK.
Katy, Brighton
I left England for Canada in 1999. This year I moved to Turkey. It is a sad and unfortunate fact that I will unlikely to be able to return to my homeland, for the simple reason that I can't afford a roof over my head. House prices are a millstone around the necks of the British people.
Peter Lee, Ankara, Turkey
Ultimately it's the customers responsibility to make sure they are not borrowing more than they can afford
Ifthir Ahmed-Miah, Newport, UK
It's all to easy to point the finger at financial advisers and the banks, the financial services industry is one of the most highly regulated industries in this country. Financial advisers are there to advise but ultimately it's the customers responsibility to make sure they are not borrowing more than they can afford. The government are also to blame for creating the environment for property prices to be out of reach of most First Time Buyers.
Ifthir Ahmed-Miah, Newport, UK
I work for an advice agency. Debt is on the increase make no mistake. However, there are priority and non-priority debts. Your mortgage gets paid pretty much above all else if you don't want to lose your property. Generally, problems are caused by a catalyst such as relationship breakdown/injury/unemployment etc. Payment protection insurance is, in my opinion worthless. So what are the options? Repossession!
Nick, Hackney
My house was repossessed a month ago. At the height of the property boom in early 2004 I splashed out far more than I could actually afford on a large property with the intention of selling it on at a profit. It wasn't long after that the property slowdown started but I kept hold of the property and financed the mortgage by getting myself further into debt, I was certain that the housing market would take off again and I would realise my gains. Following two years of quite harsh housing market drops in the south west I have been forced to admit defeat.
I blame myself for everything that has happened but I also think there are a lot of companies around who like to put a rosy outlook on the housing market and try to make everyone think it will always go up (estate agents, surveyors, mortgage companies), they should take part of the blame for lying to the public.
Dan, Bristol
It's another sign that that the boom in house prices is over and set for a steep fall over the next few years, just like they always have done after previous such unsustainable rises. What's more worrying this time around however is that interest rates are low, at the moment, but because of high personal debt and high cost of living, people are starting to struggle already. High prices do no-one any good. Even Estate agents are talking the market down - they need sales at any price, not high prices preventing sales.
Andrew, Lewes
Can we stop blaming always the estate agents and banks? I appreciate that they do play a big role in this mess, but why can people, for once, look at their own pockets and stop being so naive? I have finally managed to buy a property at the top of the market price, because I was fed up to pay rent and the flat I was living in was too small. I have stretched my finances as much as possible but the last thing I want is for my house to be repossessed. I live on potatoes and beans before that happens!
Tamara, Aylesbury
It is far too easy to borrow vast amounts of money
Andy New, Norwich
I work in the mortgage/financial industry and it is far too easy to borrow vast amounts of money. People can re-mortgage up to the value of potentially over inflated property prices and buy cars, go on holidays etc. This puts such a strain on individual's finances when rates change, but companies continually encourage it with promotions, low start rates and cash back. A lot of the responsibility is down to the customer to limit their borrowing and not get caught up in the 'live for today' or the mortgage marketing ploy. This also applies to the credit card and loan companies.
Andy New, Norwich, UK
I agree with Mike. The main cause lies in the LTV and imprudent leading by banks etc. Sales targets and competition have taken over from concerns about ability to service debt in the long term.
John, Kingston upon Thames, Surrey
It's nothing more than another sign of a greedy society that thinks it's acceptable to spend beyond its means. I wonder how many people who have had their homes repossessed also have unpaid credit card bills, personal loans, car finance etc.
Neil Wallace, Sheffield
I personally think that it's the mortgage agent who should be held responsible for property repossession. I know few people who have managed to borrow more then they can actually repay! Just for the sake of being on the property ladder. There are agents who can manipulate data in order to secure you the mortgage to buy your dream home. There must a law to catch these people.
Nehal, London
People are obsessed by how much their house is worth. How much money they have "made". The amount of friends I know who no longer buy houses because they would be a nice home but because it can make money. This is just pushing house prices and mortgage repayments out of control leading to this problem. There are no winners apart from the banks. I wish we could realise this and bring prices down to the level they should be.
Alex, Bromley
It goes to show that only property dealers and estate agents and banks benefit from crazy house prices. Normal people who just want somewhere to live, especially young people and young families can no longer afford to buy a house and those who's houses have gone up in value do not benefit because what can they do, sell up? And live where?
Leigh Porter, Fulham UK
The lenders tend to blame the increase in repossessions on increases in interest rates. However, if they had been more prudent in the amount that was borrowed many of these cases would not have arisen. Lenders have been too keen to provide high LTVs and income multiples.
Mike, Reading
Stop your repossession now www.capital-advantage.co.uk
Concerns over debt levels are rising
Mortgage repossession orders during the past three months in England and Wales were up 66% on a year ago to nearly 20,000, official figures have shown.
Repossession orders have been on the increase since early 2004.
The figures show the total number of homeowners being taken to court by lenders pursuing mortgage debt rose 55% to nearly 30,000.
The Department for Constitutional Affairs figures will add to concerns about debt and the housing market.
"The increase in mortgage possessions fits with the slowdown in house price inflation," Alan Clarke, UK economist at BNP Paribas, said.
"The conclusion is there are still signs of financial stress among homeowners," he added.
Lower than average
In July, the Council for Mortgage Lenders (CML) said there were 4,640 homes repossessed during the first half of 2005 compared with 3,070 for the previous six months.
Lenders have blamed rising repossessions on five interest rate rises between November 2003 and August 2004.
In August this year, UK interest rates were cut by the Bank of England's Monetary Policy Committee from 4.75% to 4.5%.
The CML has predicted that more than 10,000 homes will be repossessed by the end of the year.
However, repossessions are still set to be much lower than the long-term average of 30,000, or the peak of 70,000 a year recorded during the early 1990s property market crash.
Enforcement
It does not automatically follow that repossession orders, as recorded by the Department for Constitutional Affairs, result in actual repossession.
Generally, the number of court repossession orders is far higher than actual repossessions because often the borrower agrees to pay or a deal is made so the order is not enforced.
A lender may also obtain more than one order for each property if a previous order has lapsed.
What do you think about these figures? Have you experienced home repossession? Do you know anyone who has? What should be done about this problem?
Your comments:
My wife and I live in a small two-bed starter property and we need to move to a lager property due to a new arrival this year, we cannot move up the property ladder because of the massive price difference between the two and three bedroom houses. We are hoping for a housing market crash so we can move on.
Steve, Boston
Perhaps the Government should consider setting a cap on rents for certain areas of the country. This would discourage greedy landlords buying up multiple properties and then charging extortionate rents for those that can least afford it. We need realistic rents in this country so that people have a real choice on whether to buy or rent. Greedy landlords aren't helping anyone but themselves and the loan companies.
Paul McDonald, Welwyn Garden City, UK
As a young teacher (married with two small children) buying a house big enough for a family of four, is completely out of the question. Even in years to come my wages will not be sufficient to cover a mortgage. In fact currently we qualify for some housing benefit for our two bed house... I can not even afford to rent a bigger place, whilst earning a reasonable wage! We are now planning to immigrate as soon as possible to enable us the live in a house big enough for all of us! No easy choice¿ the thought of leaving our home country makes us all very sad...
Kai, Derby, Derbyshire
It makes me laugh so many people out there looking to blame someone else rather than taking responsibility of their own actions. I agree there should be some sort of 'cap' on the amount borrowed which would have helped control house prices / debt over the years but there wasn't. Ultimately the responsibility lies with the person signing the contract; a simple question of can we actually afford this on our income needs to be asked. As for the guy who said the lender should be liable for any amounts borrowed over 3 x salary....what a joke, maybe he should learn to say no!
Ian, Kent
With my wife we are about to complete on our first house. If it wasn't for the help of family members who made it possible for us to have a 30% deposit, we would have never made it. We are higher rate tax payers and the repayments will be a bit higher than the rent, but manageable. I think people need to take more responsibility for their actions and stop blaming others (banks, government, advisers) We saved as much as we could for four years and now we can get on the ladder.
Juan C, Surrey, UK
First and foremost, people must take responsibility for their own actions rather than blame others, which seem ever more the case. Property prices have gone up as much as they have because we, the purchasers, are willing to pay. Like it or not, as new building land in the UK becomes rarer, property can only get more expensive. If people wish to own property they need to work for it, with both partners working full time, and save for it, cutting out the unnecessary luxuries. If that's too much too ask, its not the governments fault.
Max, Bury St Edmunds, Suffolk
House prices are at unsustainable levels due to a combination of cheap debt, lax lending, and people's naivety thinking markets only go up. Buy-to-let investors have kept the market propped up until now, they are fast disappearing. Government is scared of a house crash hence their ill advised SIPP legislation attempting to prop up the creaking edifice a while longer- just delaying the inevitable.
Andy, Richmond, Surrey
I left England and bought a house in Germany. It is an accepted fact here that as your house becomes older the price is likely to depreciate or hopefully retain the same value. Of course the same city centre prices apply here as well but the market as a whole is more stable and government tax breaks still exist.
Mike James, Langenfeld, Germany
I think the real problem stems from how easy it is to re-mortgage your home. We did it in the past and we paid off credit cards, etc. and had a really good holiday that year. We didn't address the real issue until recently, that we weren't using our credit wisely. We straightened ourselves out and life is much better now. I truly don't think this is about first time mortgages but what happens when a remortgage kicks in.
Val, USA
I have saved very hard and had some very well paid jobs (above the national average) yet I am not able to purchase a property unless I moved out of London. Then I have the inconvenience of a long journey and all the risks that presents compounded by high transport costs. It is very difficult as a single person to get on the property ladder relying on a salary only. I have a good deposit but alas it is still inadequate unless I double my salary and take out a 30 year plus loan.
Jo, London
Most other countries have borrowed to prop up the economy. This government has preferred to encourage individuals to borrow instead, to fuel consumer spending and the economy. As the consumer credit levels reach their maximum, the harsh reality of this error will effect not just the country but also all businesses and individuals. This is going to get nastier yet.
Graham Found, Banwell, North Somerset
House prices are ludicrously high, and this will not improve when the government gives tax breaks for wealthy people to put homes into their pension schemes at the expense of normal people who just want a home. However, people do also have elevated expectations for their lifestyles - designer-label clothes and cars and so on - which can't help them to reduce their debt. It's hard to apportion blame in such a silly situation but the government needs to do something (if only to abandon its pension tax-break plan) if we are not to see a lot of families without proper homes in the future.
David, Surrey
I earn just over 40,000 GBP a year, but cannot afford to buy a house. Because of earlier financial difficulties we didn't buy a house when we should have, and now have 2 kids. A three bedroom house, even in a poor area in town, is 150,000 pounds which is more than three and half times my income and a lot of money to repay each month as a mortgage. It seems crazy that property prices have reached the point where people paying the higher rate of tax cannot afford to get on the property ladder.
Ian Matthews, Shrewsbury, UK
I work for a financial institution that takes responsible lending seriously. Unfortunately, too many institutions are so driven by their own sales/growth targets and the problems faced by increasing house prices that they have relaxed their lending policies to enable people to borrow far more than they would have been able to over latter years. A number of people probably haven't worked out how much of an increase in monthly commitments a 1%, 2% hike in base rate makes. Ultimately, the borrower must take full responsibility for their commitment, but I believe that the lenders have a duty to lend responsibly based on their income.
Gareth, Swansea
I am an independent financial adviser and I'll accept that it is difficult for first time buyers to get on the property ladder. However, I don't often see first time buyers sacrificing any luxuries or modifying their lifestyles to save for their deposit. Is it peer pressure, lack of guidance from parents or a general lack of understanding of debt that makes this the case? I don't know! In general people need to be more responsible for their own actions and not blame the banks, the government or the advisers for what is often a self generated problem.
Neil Burton, Tunbridge Wells, Kent
I had 14 different credit cards three years ago totalling £114,000! Obviously I couldn't cope with the repayments and got a Trust Deed. This helped to get my finances back in order and three years later I am much more credit savvy. But, the finance companies and banks etc keep offering more and more credit. They have to stop or be stopped by government legislation. No-one should have more debt than, say, three times their earnings (including mortgage ). If someone lends a person over and above this level, then the lender should be liable! The number of people who are really struggling is way above the estimates from the government who don't want to admit to the problem. Pete, Hamilton, Scotland
I find it laughable that the lenders blame interest rate rises. They know better than anybody that 4.75% is still a historically low rate. Surely anybody taking out a mortgage should ensure they can afford at least a 2% rise in interest rates. I think we all know that high house prices are the problem here but the housing industry dare not admit it as their profits are at stake.
Andy, Beds
I think people should start to take responsibility for there own actions. No estate agent or bank person was there holding a gun to there head forcing them to take a mortgage that they could not pay for. These people get themselves in to debt buy maxing out all available credit then when the interest goes up they can no longer service the debt and are all surprised by this.
Christopher, Canada
Thank goodness that we are beginning to face up to our financial responsibilities. My son and his partner were able to borrow a horrific sum of money to buy a new house and are struggling to make ends meet. How many others are in a similar position but are simply too embarrassed to admit it?
Betty Middleton, Lancaster
We have become too focused on home ownership. I would be content to rent if the rent I paid was affordable (but I would be hard pushed to find as nice a home to live in the in the private rented sector for the same amount my mortgage costs me) and if I felt I could stay there with some security and a landlord that kept the house up to a high standard. But that's not the way we are set up to live in the UK.
Katy, Brighton
I left England for Canada in 1999. This year I moved to Turkey. It is a sad and unfortunate fact that I will unlikely to be able to return to my homeland, for the simple reason that I can't afford a roof over my head. House prices are a millstone around the necks of the British people.
Peter Lee, Ankara, Turkey
Ultimately it's the customers responsibility to make sure they are not borrowing more than they can afford
Ifthir Ahmed-Miah, Newport, UK
It's all to easy to point the finger at financial advisers and the banks, the financial services industry is one of the most highly regulated industries in this country. Financial advisers are there to advise but ultimately it's the customers responsibility to make sure they are not borrowing more than they can afford. The government are also to blame for creating the environment for property prices to be out of reach of most First Time Buyers.
Ifthir Ahmed-Miah, Newport, UK
I work for an advice agency. Debt is on the increase make no mistake. However, there are priority and non-priority debts. Your mortgage gets paid pretty much above all else if you don't want to lose your property. Generally, problems are caused by a catalyst such as relationship breakdown/injury/unemployment etc. Payment protection insurance is, in my opinion worthless. So what are the options? Repossession!
Nick, Hackney
My house was repossessed a month ago. At the height of the property boom in early 2004 I splashed out far more than I could actually afford on a large property with the intention of selling it on at a profit. It wasn't long after that the property slowdown started but I kept hold of the property and financed the mortgage by getting myself further into debt, I was certain that the housing market would take off again and I would realise my gains. Following two years of quite harsh housing market drops in the south west I have been forced to admit defeat.
I blame myself for everything that has happened but I also think there are a lot of companies around who like to put a rosy outlook on the housing market and try to make everyone think it will always go up (estate agents, surveyors, mortgage companies), they should take part of the blame for lying to the public.
Dan, Bristol
It's another sign that that the boom in house prices is over and set for a steep fall over the next few years, just like they always have done after previous such unsustainable rises. What's more worrying this time around however is that interest rates are low, at the moment, but because of high personal debt and high cost of living, people are starting to struggle already. High prices do no-one any good. Even Estate agents are talking the market down - they need sales at any price, not high prices preventing sales.
Andrew, Lewes
Can we stop blaming always the estate agents and banks? I appreciate that they do play a big role in this mess, but why can people, for once, look at their own pockets and stop being so naive? I have finally managed to buy a property at the top of the market price, because I was fed up to pay rent and the flat I was living in was too small. I have stretched my finances as much as possible but the last thing I want is for my house to be repossessed. I live on potatoes and beans before that happens!
Tamara, Aylesbury
It is far too easy to borrow vast amounts of money
Andy New, Norwich
I work in the mortgage/financial industry and it is far too easy to borrow vast amounts of money. People can re-mortgage up to the value of potentially over inflated property prices and buy cars, go on holidays etc. This puts such a strain on individual's finances when rates change, but companies continually encourage it with promotions, low start rates and cash back. A lot of the responsibility is down to the customer to limit their borrowing and not get caught up in the 'live for today' or the mortgage marketing ploy. This also applies to the credit card and loan companies.
Andy New, Norwich, UK
I agree with Mike. The main cause lies in the LTV and imprudent leading by banks etc. Sales targets and competition have taken over from concerns about ability to service debt in the long term.
John, Kingston upon Thames, Surrey
It's nothing more than another sign of a greedy society that thinks it's acceptable to spend beyond its means. I wonder how many people who have had their homes repossessed also have unpaid credit card bills, personal loans, car finance etc.
Neil Wallace, Sheffield
I personally think that it's the mortgage agent who should be held responsible for property repossession. I know few people who have managed to borrow more then they can actually repay! Just for the sake of being on the property ladder. There are agents who can manipulate data in order to secure you the mortgage to buy your dream home. There must a law to catch these people.
Nehal, London
People are obsessed by how much their house is worth. How much money they have "made". The amount of friends I know who no longer buy houses because they would be a nice home but because it can make money. This is just pushing house prices and mortgage repayments out of control leading to this problem. There are no winners apart from the banks. I wish we could realise this and bring prices down to the level they should be.
Alex, Bromley
It goes to show that only property dealers and estate agents and banks benefit from crazy house prices. Normal people who just want somewhere to live, especially young people and young families can no longer afford to buy a house and those who's houses have gone up in value do not benefit because what can they do, sell up? And live where?
Leigh Porter, Fulham UK
The lenders tend to blame the increase in repossessions on increases in interest rates. However, if they had been more prudent in the amount that was borrowed many of these cases would not have arisen. Lenders have been too keen to provide high LTVs and income multiples.
Mike, Reading
Stop your repossession now www.capital-advantage.co.uk
Beware of Garbage Trucks by David J.Pollay
Beware of Garbage Trucks
By David J. Pollay
How often do you let other people's nonsense change your mood? Do you let a bad driver, rude waiter, curt boss, or an insensitive employee or co-worker ruin your day? Unless you're the Terminator, for an instant you're probably set back on your heels. However, the mark of a successful person is how quickly they can get back their focus on what's important.
Sixteen years ago I learned this lesson. I learned it in the back of a New York City taxi cab. Here's what happened:
I hopped in a taxi, and we took off for Grand Central Station. We were driving in the right lane when, all of a sudden, a black car jumped out of a parking space right in front of us. My taxi driver slammed on his breaks, skidded, and missed the other car's back end by just inches!
The driver of the other car, the guy who almost caused a big accident, whipped his head around and started yelling bad words at us. My taxi driver just smiled and waved at the guy. And I mean, he was friendly. So, I said, "Why did you just do that? This guy almost ruined your car and sent us to the hospital!" And this is when my taxi driver told me; what I now call, "The Law of the Garbage Truck."
Many people are like garbage trucks. They run around full of garbage, full of frustration, filled with anger, and full of disappointment. As their garbage piles up, they need a place to dump it. And if you let them, they'll dump it on you. When someone wants to dump on you, don't take it personally. You just smile, wave, wish them well, and move on. You'll be happy you did. So this was it: The "Law of the Garbage Truck."
I started thinking, how often do I let Garbage Trucks run right over me? And how often do I take their garbage and spread it to other people: at work, at home, on the streets? It was that day I said, "I'm not going to do it anymore."
I began to see garbage trucks. Like in the movie "The Sixth Sense," the little boy said, "I see dead people." Well, now "I see Garbage Trucks." I see the load they're carrying. I see them coming to drop it off. And like my Taxi Driver, I don't make it a personal thing; I just smile, wave, wish them well, and I move on.
One of my favorite football players of all time, Walter Payton, did this every day on the football field. He would jump up as quickly as he hit the ground after being tackled. He never dwelled on a hit. Payton was ready to make the next play his best. Good leaders know they have to be ready for their next meeting. Good parents know that they have to welcome their children home from school with hugs and kisses. Leaders and parents know that they have to be fully present, and at their best for the people they care about.
The bottom line is that successful people do not let Garbage Trucks take over their day. What about you? What would happen in your life, starting today, if you let more Garbage Trucks pass you by?
Here's my bet. You'll be happier. Life's too short to wake up in the morning with regrets, so...
Love the people who treat you right. Forget about the ones who don't. Believe that everything happens for a reason. If you get a chance, TAKE IT! If it changes your life, LET IT!
Nobody said it would be easy... they just promised it would be worth it!
By David J. Pollay
How often do you let other people's nonsense change your mood? Do you let a bad driver, rude waiter, curt boss, or an insensitive employee or co-worker ruin your day? Unless you're the Terminator, for an instant you're probably set back on your heels. However, the mark of a successful person is how quickly they can get back their focus on what's important.
Sixteen years ago I learned this lesson. I learned it in the back of a New York City taxi cab. Here's what happened:
I hopped in a taxi, and we took off for Grand Central Station. We were driving in the right lane when, all of a sudden, a black car jumped out of a parking space right in front of us. My taxi driver slammed on his breaks, skidded, and missed the other car's back end by just inches!
The driver of the other car, the guy who almost caused a big accident, whipped his head around and started yelling bad words at us. My taxi driver just smiled and waved at the guy. And I mean, he was friendly. So, I said, "Why did you just do that? This guy almost ruined your car and sent us to the hospital!" And this is when my taxi driver told me; what I now call, "The Law of the Garbage Truck."
Many people are like garbage trucks. They run around full of garbage, full of frustration, filled with anger, and full of disappointment. As their garbage piles up, they need a place to dump it. And if you let them, they'll dump it on you. When someone wants to dump on you, don't take it personally. You just smile, wave, wish them well, and move on. You'll be happy you did. So this was it: The "Law of the Garbage Truck."
I started thinking, how often do I let Garbage Trucks run right over me? And how often do I take their garbage and spread it to other people: at work, at home, on the streets? It was that day I said, "I'm not going to do it anymore."
I began to see garbage trucks. Like in the movie "The Sixth Sense," the little boy said, "I see dead people." Well, now "I see Garbage Trucks." I see the load they're carrying. I see them coming to drop it off. And like my Taxi Driver, I don't make it a personal thing; I just smile, wave, wish them well, and I move on.
One of my favorite football players of all time, Walter Payton, did this every day on the football field. He would jump up as quickly as he hit the ground after being tackled. He never dwelled on a hit. Payton was ready to make the next play his best. Good leaders know they have to be ready for their next meeting. Good parents know that they have to welcome their children home from school with hugs and kisses. Leaders and parents know that they have to be fully present, and at their best for the people they care about.
The bottom line is that successful people do not let Garbage Trucks take over their day. What about you? What would happen in your life, starting today, if you let more Garbage Trucks pass you by?
Here's my bet. You'll be happier. Life's too short to wake up in the morning with regrets, so...
Love the people who treat you right. Forget about the ones who don't. Believe that everything happens for a reason. If you get a chance, TAKE IT! If it changes your life, LET IT!
Nobody said it would be easy... they just promised it would be worth it!
Thursday, February 21, 2008
Compulsory Liquidation > I am owed money by a company that is in liquidation
Compulsory Liquidation > I am owed money by a company that is in liquidation
If you are a creditor (owed money by) of a company in liquidation the Official Receiver (OR) will normally notify you (within 12 weeks of the date of the court order) whether a meeting of creditors will be held. The OR will decide to hold a meeting if the company has significant assets available that can be realised for the benefit of creditors.
You will also be sent a report giving estimates of the insolvent’s assets and liabilities and what the causes of the failure are considered to be. If you think that a bankrupt or company is withholding information about its assets, you should write to the OR dealing with the case.
If you have not been contacted then you should write to the OR or insolvency practitioner (IP) if the case has been handed over to one, quoting the court reference of the case if possible, advising him/her that you are a creditor.
If you are unsure of the company number, who the OR/IP is, or wish to find out if a company is in liquidation, then you should search the register of companies at Companies House.
If the company is in liquidation the status in the search result will be 'L'. If you then click on the company number to the left of the status column you will be presented with a page detailing company information.
This website has a publication that may be helpful – ‘A Guide to Creditors’ Specific queries relating to a case should be directed to the OR or IP.
For general enquiries on insolvency matters you can contact The Insolvency Service Insolvency Enquiry Line on 0845 602 9848; or email: Insolvency.EnquiryLine@insolvency.gsi.gov.uk
The Law in England and Wales relating to bankruptcy is different to that in Scotland and Northern Ireland.
For information in Scotland you should contact The Accountant in Bankruptcy at:
The Accountant in Bankruptcy1 Pennyburn RoadKilwinningAyrshireKA13 6SA
Switchboard: 0845 612 6460
Helpline: 0845 762 6171
Website : www.aib.gov.uk
For information in Northern Ireland you should contact The Insolvency Service of Northern Ireland at:
The Insolvency ServiceFermanagh HouseOrmeau AvenueBelfastBT2 8NJ
Tel: 02890 251441
Further information
Dealing with debt - how to wind up a company the owes you money
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
If you are a creditor (owed money by) of a company in liquidation the Official Receiver (OR) will normally notify you (within 12 weeks of the date of the court order) whether a meeting of creditors will be held. The OR will decide to hold a meeting if the company has significant assets available that can be realised for the benefit of creditors.
You will also be sent a report giving estimates of the insolvent’s assets and liabilities and what the causes of the failure are considered to be. If you think that a bankrupt or company is withholding information about its assets, you should write to the OR dealing with the case.
If you have not been contacted then you should write to the OR or insolvency practitioner (IP) if the case has been handed over to one, quoting the court reference of the case if possible, advising him/her that you are a creditor.
If you are unsure of the company number, who the OR/IP is, or wish to find out if a company is in liquidation, then you should search the register of companies at Companies House.
If the company is in liquidation the status in the search result will be 'L'. If you then click on the company number to the left of the status column you will be presented with a page detailing company information.
This website has a publication that may be helpful – ‘A Guide to Creditors’ Specific queries relating to a case should be directed to the OR or IP.
For general enquiries on insolvency matters you can contact The Insolvency Service Insolvency Enquiry Line on 0845 602 9848; or email: Insolvency.EnquiryLine@insolvency.gsi.gov.uk
The Law in England and Wales relating to bankruptcy is different to that in Scotland and Northern Ireland.
For information in Scotland you should contact The Accountant in Bankruptcy at:
The Accountant in Bankruptcy1 Pennyburn RoadKilwinningAyrshireKA13 6SA
Switchboard: 0845 612 6460
Helpline: 0845 762 6171
Website : www.aib.gov.uk
For information in Northern Ireland you should contact The Insolvency Service of Northern Ireland at:
The Insolvency ServiceFermanagh HouseOrmeau AvenueBelfastBT2 8NJ
Tel: 02890 251441
Further information
Dealing with debt - how to wind up a company the owes you money
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
Compulsory Liquidation > What is Compulsory Liquidation?
Compulsory Liquidation > What is Compulsory Liquidation?
What types of liquidation are there?
Members' voluntary liquidation (or members' voluntary winding up) - this is when the shareholders of a company decide to put it into liquidation, and there are enough assets to pay all the debts of the company, i.e. the company is solvent.
Creditors' voluntary liquidation (or creditors' voluntary winding up) - this is when the shareholders of a company decide to put the company into liquidation, but there are not enough assets to pay all the creditors, i.e. the company is insolvent.
Compulsory liquidation (or compulsory winding up) - this is when the court makes an order for the company to be wound up (a 'winding-up order') on the petition of an appropriate person. If there is more than one director, all the directors must jointly present the winding-up petition - a single director cannot present a winding-up petition.
If you are a director or a shareholder and you are also a creditor of your company, you may wish to present a winding-up petition on the grounds that the company cannot pay its debts. Please read our publication 'Dealing with debt - How to wind up a company that owes you money' for more information.
Where can I get advice about liquidation?
Before you take any action to put a company into liquidation, you should obtain your own legal or financial advice about this procedure and any other options available to you. You can get advice from your local Citizens Advice Bureau, a solicitor, a qualified accountant, an authorised insolvency practitioner, any reputable financial adviser or a debt advice centre.
What are the alternatives to liquidation?
There are 3 possibilities:
Informal arrangement - the company could consider writing to all its creditors to see if a mutually acceptable agreement can be reached. It is advisable to include a timetable of when payments will be made.
Company voluntary arrangement (CVA) - this is a formal version of the arrangement described above. The directors would need to apply to the court with the help of an authorised insolvency practitioner, who would supervise the arrangement and pay the creditors in line with the accepted proposals.
Administration - this is a court procedure that gives the company some breathing space from any action by creditors. A court can grant an administration order to enable the company to:
survive, in whole or in part, as an ongoing business;
organise a voluntary arrangement or compromise with its creditors;
get a better realisation of assets than would be possible if the company went into liquidation.
The procedure is managed by an administrator, who must be an authorised insolvency practitioner.
Further Information
You can find further information in the publication 'Dealing with Debt - How to wind up my own company'
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
What types of liquidation are there?
Members' voluntary liquidation (or members' voluntary winding up) - this is when the shareholders of a company decide to put it into liquidation, and there are enough assets to pay all the debts of the company, i.e. the company is solvent.
Creditors' voluntary liquidation (or creditors' voluntary winding up) - this is when the shareholders of a company decide to put the company into liquidation, but there are not enough assets to pay all the creditors, i.e. the company is insolvent.
Compulsory liquidation (or compulsory winding up) - this is when the court makes an order for the company to be wound up (a 'winding-up order') on the petition of an appropriate person. If there is more than one director, all the directors must jointly present the winding-up petition - a single director cannot present a winding-up petition.
If you are a director or a shareholder and you are also a creditor of your company, you may wish to present a winding-up petition on the grounds that the company cannot pay its debts. Please read our publication 'Dealing with debt - How to wind up a company that owes you money' for more information.
Where can I get advice about liquidation?
Before you take any action to put a company into liquidation, you should obtain your own legal or financial advice about this procedure and any other options available to you. You can get advice from your local Citizens Advice Bureau, a solicitor, a qualified accountant, an authorised insolvency practitioner, any reputable financial adviser or a debt advice centre.
What are the alternatives to liquidation?
There are 3 possibilities:
Informal arrangement - the company could consider writing to all its creditors to see if a mutually acceptable agreement can be reached. It is advisable to include a timetable of when payments will be made.
Company voluntary arrangement (CVA) - this is a formal version of the arrangement described above. The directors would need to apply to the court with the help of an authorised insolvency practitioner, who would supervise the arrangement and pay the creditors in line with the accepted proposals.
Administration - this is a court procedure that gives the company some breathing space from any action by creditors. A court can grant an administration order to enable the company to:
survive, in whole or in part, as an ongoing business;
organise a voluntary arrangement or compromise with its creditors;
get a better realisation of assets than would be possible if the company went into liquidation.
The procedure is managed by an administrator, who must be an authorised insolvency practitioner.
Further Information
You can find further information in the publication 'Dealing with Debt - How to wind up my own company'
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
Monday, February 18, 2008
Saturday, February 16, 2008
Case Study
Case study:
Small Public House management Company with 7 leashold pubs and bars, all over rented, high rates, and utilites, over staffed and losing stock through bad stock controls. large Vat debt and bailiffs into the business every other day.
Solution:
Advised on the overall picture, we supplied and advised regarding stock controls, put in covert operative to monitor the situation regarding thefts.
Came to a repayment schedule with the VAT to keep the business trading, negotiated hand back of 3 of the sites to the landlord, obtained more comepetive ultility supplies and settled the present bills.
Obtained more competive funding with cash back.
Small pub group now trading at a profit and protected the Directors positions.
Small Public House management Company with 7 leashold pubs and bars, all over rented, high rates, and utilites, over staffed and losing stock through bad stock controls. large Vat debt and bailiffs into the business every other day.
Solution:
Advised on the overall picture, we supplied and advised regarding stock controls, put in covert operative to monitor the situation regarding thefts.
Came to a repayment schedule with the VAT to keep the business trading, negotiated hand back of 3 of the sites to the landlord, obtained more comepetive ultility supplies and settled the present bills.
Obtained more competive funding with cash back.
Small pub group now trading at a profit and protected the Directors positions.
UK Column
The Free Press may have been written some ninety odd years ago, but the observations and comments made by its visionary English author Hilaire Belloc provide a guide as to the nature of so-called free speech within a so-called free and democratic nation.
It’s also useful as a primer for anyone involved with extending the reach of The Column. In fact, Belloc would have been most comfortable with the internet and blogging. He could easily have been writing about the role of The Column when he states at the beginning -
“I PROPOSE to discuss in what follows the evil of the great modern Capitalist Press, its function in vitiating and misinforming opinion and in putting power into ignoble hands; its correction by the formation of small independent organs, and the probably increasing effect of these last.”
It’s also useful as a primer for anyone involved with extending the reach of The Column. In fact, Belloc would have been most comfortable with the internet and blogging. He could easily have been writing about the role of The Column when he states at the beginning -
“I PROPOSE to discuss in what follows the evil of the great modern Capitalist Press, its function in vitiating and misinforming opinion and in putting power into ignoble hands; its correction by the formation of small independent organs, and the probably increasing effect of these last.”
'A nation can survive its fools and even the ambitious. But it cannot survive treason from within. An enemy at the gate is less formidable, for he is known and carries his banners openly against the city. But the traitor moves among those within the gates freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in the accents familiar to his victims, and he wears their face and their garments, and he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation; he works secretly and unknown in the night to undermine the pillars of a city; he infects the body politic so that it can no longer resist. A murderer is less to be feared.'-- Cicero, 45 BC
Well worth a visit to help keep your mind free.
Sell Your House, Sell Your Business
Sell Your House, Sell Your Business
'We aim to make sellers happy and buyers profitable!!!!'
' How can we do it like this? We make money by putting interested buyers in touch with people wanting to sell'
'Are you tired of looking for a business to buy only to be greeted by uneconomic businesses at unrealistic prices....
Contact us today and ask about our bespoke service, fitting you to the right business at the right price'
Montague Lloyd The Bespoke On & Off Line Agents
'We aim to make sellers happy and buyers profitable!!!!'
' How can we do it like this? We make money by putting interested buyers in touch with people wanting to sell'
'Are you tired of looking for a business to buy only to be greeted by uneconomic businesses at unrealistic prices....
Contact us today and ask about our bespoke service, fitting you to the right business at the right price'
Montague Lloyd The Bespoke On & Off Line Agents
Friday, February 15, 2008
Home repossessions 'rise by 30%'
The number of people having their homes repossessed has surged, the Council of Mortgage Lenders (CML) has said.
An estimated 14,000 properties were repossessed in the first six months of the year, a 30% increase on the same time last year.
http://news.bbc.co.uk/1/hi/business/6929361.stm
An estimated 14,000 properties were repossessed in the first six months of the year, a 30% increase on the same time last year.
http://news.bbc.co.uk/1/hi/business/6929361.stm
Tuesday, February 12, 2008
Monday, February 11, 2008
Bankruptcy - I am owed money by a bankrupt
Bankruptcy > I am owed money by a bankrupt
If you are a creditor of (owed money by) a person that is bankrupt the Official Receiver (OR) will normally notify you (within 12 weeks of the date of the court order) whether a meeting of creditors will be held. The OR will decide to hold a meeting if there are significant assets.
You will also be sent a report giving estimates of the insolvent’s assets and liabilities and what the causes of the failure are considered to be. If you think that a bankrupt or company is withholding information about the assets, you should write to the OR dealing with the case.
If you have not been contacted then you should write to the OR or insolvency practitioner (IP) if the case has been handed over to one, quoting the court reference of the case if possible, advising him/her that you are a creditor.
If you are unsure of the court reference, who the OR/IP is, or wish to find out if an individual is bankrupt, then you should search the Individual Insolvency Register. This can be done by following the instructions given in our publication 'The Individual Insolvency Register'
This website also has a page where you can find our publications. There are two general guidance publications that may be helpful – ‘A Guide to Creditors'. Specific queries relating to a case should be directed to the relevant Official Receiver or insolvency practitioner.
For general enquiries on insolvency matters you can contact The Insolvency Service Insolvency Enquiry Line on 0845 602 9848; or email: Insolvency.Enquiryline@insolvency.gsi.gov.uk
Further information
Dealing with debt - How to make someone bankrupt
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
If you are a creditor of (owed money by) a person that is bankrupt the Official Receiver (OR) will normally notify you (within 12 weeks of the date of the court order) whether a meeting of creditors will be held. The OR will decide to hold a meeting if there are significant assets.
You will also be sent a report giving estimates of the insolvent’s assets and liabilities and what the causes of the failure are considered to be. If you think that a bankrupt or company is withholding information about the assets, you should write to the OR dealing with the case.
If you have not been contacted then you should write to the OR or insolvency practitioner (IP) if the case has been handed over to one, quoting the court reference of the case if possible, advising him/her that you are a creditor.
If you are unsure of the court reference, who the OR/IP is, or wish to find out if an individual is bankrupt, then you should search the Individual Insolvency Register. This can be done by following the instructions given in our publication 'The Individual Insolvency Register'
This website also has a page where you can find our publications. There are two general guidance publications that may be helpful – ‘A Guide to Creditors'. Specific queries relating to a case should be directed to the relevant Official Receiver or insolvency practitioner.
For general enquiries on insolvency matters you can contact The Insolvency Service Insolvency Enquiry Line on 0845 602 9848; or email: Insolvency.Enquiryline@insolvency.gsi.gov.uk
Further information
Dealing with debt - How to make someone bankrupt
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
Saturday, February 9, 2008
Directors and Secretaries Guide - GBA1
Directors and Secretaries Guide - GBA1
August 2007 version 13
Contents
Introduction
Limited companies: the basics
Role of a company director
Role and duties of a company secretary
What you have to send to Companies House
Quality of documents
Further information
This is a guide only and should be read with the relevant legislation.Back to top Introduction All companies must have officers. This means at least one director and a company secretary for a private limited company, and at least two directors and a company secretary for a public limited company. The director, or directors, must manage the company's affairs in accordance with its articles of association and the law. Certain responsibilities apply to all directors, whether executive or non-executive, and to all types of company whether trading or not. The company secretary is the chief administrator of the company.
This guide:
explains some of the main responsibilities of a company's officers; and
deals with some of the key requirements of the Companies Act 1985 in relation to the delivery of documents to Companies House. When we refer to 'the Act' in this booklet, we mean the 1985 Companies Act (as amended in 1989 and later). The guide will not tell you everything about being a director or secretary, but it will give you a good idea of your responsibilities as they relate to Companies House. If, after reading this guide, you are in doubt about your responsibilities, you should seek professional advice from a solicitor or accountant. Back to top CHAPTER 1Limited companies: the basics 1. Do I really need a limited company? The majority of businesses are not companies. The reasons for having a company are varied, for example, it could involve ownership of property, obtaining investment funds, taxation or contractual relationships. Many businesses function satisfactorily as sole traders or partnerships. The key point to recognise is that a company is a separate entity.
This means that it is a legal person in its own right.
It is separate from those who own or run it, and has 'limited liability'. 2. What does limited liability mean? Limited liability gives the owners of the company (its shareholders) protection if the company fails. This means that if a company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts. 3. How do I set up a limited company? If you decide, maybe after taking professional advice, that a limited company is the best thing for your business, you can buy a ready-made company from a company incorporation agent. Alternatively, you can incorporate a company yourself - for details see our booklets, 'Company Formations' and 'Company Names'. 4. What can I do with an unwanted company? If you decide that you do not need a company that you have set up, you should consider putting it into voluntary liquidation. If the company cannot afford this, you may be able to apply for it to be struck off the register. Our guidance booklets 'Liquidation and Insolvency' or 'Liquidation and Insolvency (Scotland)' and 'Strike-off, Dissolution and Restoration' or 'Strike-off, Dissolution and Restoration (Scotland)', will give you more information on these subjects.Back to top CHAPTER 2Role of a company director 1. Can anyone be a director? Generally it is up to the members to appoint the people they believe will run the company well on their behalf.
The only restrictions that prevent anyone becoming a director are:
the person must not have been disqualified by a court from acting as a company director (unless he or she has been given leave (permission) to act by a court for a particular company);
the person must not be an undischarged bankrupt (except with leave of the court);
in Scotland, anybody under the age of 16 2. What responsibilities does a director have towards Companies House? Every company director has a personal responsibility to ensure that statutory documents are delivered to the Registrar as and when required by the Act. In particular:
accounts (only for limited companies);
annual returns (Form 363);
notice of change of directors or secretaries or in their particulars (Forms 288a/b/c); and
notice of change of registered office (Form 287). Chapter 4 summarises what a limited company has to send to Companies House. 3. What happens if accounts or annual returns are not filed? All the directors of the company could be prosecuted. Failure to deliver documents on time is a criminal offence. On conviction, a director could end up with a criminal record and a fine of up to £5,000 for each offence. Alternatively, if the Registrar believes that the company is no longer carrying on business or in operation, he could strike it off the register and dissolve it. If this happens all the assets of the company, including its bank account and property, generally become the property of the Crown. The company can only be restored to the register and continue in existence by means of a court order. See our booklet, 'Strike-off, Dissolution and Restoration' or 'Strike-off, Dissolution and Restoration (Scotland)', for details. 4. Are directors really prosecuted? Yes. On average more than 1,000 directors are prosecuted each year for failing to deliver accounts and returns to the Registrar on time. Persistent failure to deliver statutory documents on time may also lead to a director being disqualified from taking part in the management of a company, for a specified period. 5. What happens if accounts are delivered late? As a director of a private limited company, you normally have a maximum of 10 months from the accounting reference date in which to deliver your company's accounts to the Registrar. The accounting reference date is the date to which your accounts must be prepared. As a director of a public limited company, you normally have a maximum of 7 months from the accounting reference date in which to deliver your company's accounts to the Registrar.
Important if your company's first accounts cover a period of more than 12 months, they must reach Companies House within 22 months of the date of incorporation for private companies and 19 months for public companies. If accounts are received late, the company will automatically be charged a 'late filing penalty'. These penalties can be in addition to any fine imposed by a court - as explained in question 3 of this chapter. The late filing penalty will be calculated according to the following scale:
Length of delay
Privatecompany
Publiccompany
3 months or less
£ 100
£ 500
3 months one day to 6 months
£ 250
£1000
6 months one day to 12 months
£ 500
£2000
More than 12 months
£1000
£5000
See our booklet, 'Late Filing Penalties', for details. 6. How can prosecution and penalties be avoided? Make sure your company complies on time with all its filing obligations, not only in connection with its accounts and annual returns, but in connection with all other documents required under the Act. 7. Isn't my accountant supposed to do all this? Your accountant's responsibilities depend on the agreement you have with him or her. However, the responsibility to deliver accounts and other statutory documents rests entirely with the directors. Ensure that your accountants have all the necessary information to prepare your accounts and get them audited on time. If necessary, chase your accountants. Don't just assume they are getting on with the job.
Accountants and financial advisers don't get prosecutedor penalised for late filing.You do! 8. Why does Companies House need this information? In exchange for the benefits of trading with limited liability, companies must deliver certain information about themselves to the Registrar. He must then make this information available for inspection by the public so that they can make informed decisions about companies that they may wish to invest in or do business with.
Remember, delivery of documents does not take place until they reach the Registrar. Back to top CHAPTER 3Role and duties of a company secretary 1. Does every company need a secretary? Yes. Section 283(1) of the Act says every company must have a secretary. Section 283(2) states that a sole director cannot also be the secretary. 2. Does a company secretary need any qualifications? The company secretary of a public limited company needs to be qualified as explained below. The company secretary of a private limited company needs no formal qualifications. Section 286 of the Act (qualifications of company secretaries) says that the directors of a public limited company must make sure, as far as reasonably possible, that the secretary, or each joint secretary, is a person who appears to them to have the proper knowledge and experience to carry out the functions of company secretary.
In addition, the secretary must also be a person who:
is a member of any of the following bodies: the Institute of Chartered Accountants in England and Wales; the Institute of Chartered Accountants of Scotland;the Institute of Chartered Accountants in Ireland; the Chartered Association of Certified Accountants; the Institute of Chartered Secretaries and Administrators; the Chartered Institute of Management Accountants; the Chartered Institute of Public Finance and Accounting; or
have held the office of secretary (or assistant or deputy secretary) of the company on 22 December 1980; or
have held the office of company secretary of a company (except a private company) for at least 3 out of the 5 years immediately before his or her appointment as secretary; or
is a barrister, advocate or solicitor called or admitted in any part of the UK; or
is a person who appears to the directors to be capable of carrying out the functions of company secretary, because he or she holds, or has held, any other similar position or is a member of any other body. 3. What are the duties of a company secretary? They are not specified by the Act, but are usually contained in an employment contract. Special duties As the secretary is an officer of the company under section 744 of the Act, they may be criminally liable for defaults committed by the company. For example failure to file - in the time allowed - any change in the details of the company's directors and secretary, and the company's annual return. The secretary may also have to make out a statement of the company's affairs if an administrative receiver or a provisional liquidator is appointed, or if a winding-up order is made. (Sections 47 (Section 66 for Scotland) and 131 of the Insolvency Act 1986.) Other duties The company secretary usually undertakes the following duties: (a) Maintaining the statutory registers.
These are:
the register of members (section 352);
the register of directors and secretaries (section 288);
the register of directors' interests (section 325);
the register of charges (section 407 or 422 for Scottish companies); and
for public companies only, the register of interests in shares (section 211). (b) Ensuring that statutory forms are filed promptly. You cannot simply send a letter to notify the Registrar that you wish to change the situation of the company's registered office or that changes have occurred among directors or secretaries or their particulars. You should normally use forms 287 and 288a, b or c as appropriate. You may also use the annual return Form 363s in some circumstances if the return is due at the convenient time. Changes of directors' and secretaries' details must be notified within 14 days. There are many other forms that need to be delivered to the Registrar. See Chapter 4, 'What you have to send to Companies House', for more information. (c) Providing members and auditors with notice of meetings. You must give them 21 days written notice of an annual general meeting. You must give them 14 days written notice of a meeting which is neither an annual general meeting or a meeting to pass a special resolution. If you are the secretary of an unlimited company, the written notice required is 7 days. (d) Sending the Registrar copies of resolutions and agreements. You must send the Registrar copies of every resolution or agreement to which section 380 applies, for example special and extraordinary resolutions, within 15 days of them being passed. (e) Supplying a copy of the accounts to every member of the company, every debenture holder and every person who is entitled to receive notice of general meetings - also copies demanded by anyone under section 239 of the Act. You must send accounts at least 21 days before a meeting at which they are to be laid - see section 238 of the Act. (f) Keeping, or arranging for the keeping, of minutes of directors' meetings and general meetings. (g) Ensuring that people entitled to do so can inspect company records. For example, members of the company and members of the public are entitled to a copy of the company's register of members, and members of the company are entitled to inspect the minutes of its general meetings and to have copies of these minutes. (h) Custody and use of the company seal. Companies no longer need to have a company seal, but if they do, the secretary is usually responsible for its custody and use. (Company seals can be bought from legal stationers and company formation agents.) 4. Does a company secretary have any powers? No, but the Act allows them to sign the following re-registration applications:
the re-registration of a limited company as unlimited - section 49(4) of the Act;
the re-registration of an unlimited company as limited - section 51(4);
the re-registration of a public company as a private company - section 53(1)(b); and
the re-registration of a private company as a public company - section 43(3). The secretary is also allowed to sign most of the forms prescribed under the Act. 5. What rights does a company secretary have? They depend on the terms of his or her contract with the company. The secretary has no special rights under the Act. Back to top CHAPTER 4What you have to send to Companies House Company directors and secretaries are responsible for delivering information to the Registrar. There are over 200 forms that companies could file. The following information deals only with the most common forms and documents that companies will use. 1. Accounts All limited companies, whether trading or not, must keep accounting records and file accounts for each accounting period with the Registrar. Unless a company is claiming exemption as a medium-sized, small, audit-exempt or dormant company, the accounts will include:
a directors' report* signed by a director or the company secretary;
a balance sheet signed by a director;
a profit and loss account (or income and expenditure account if the company is not trading for profit);
an auditors' report signed by the auditor;
notes to the accounts; and
group accounts (if appropriate).
* For accounting periods beginning on or after 01 October 2007, directors’ reports must contain a business review. This does not apply to companies that qualify as small.
Our booklet, 'Accounts and Accounting Reference Dates', provides more information on preparing and filing accounts and about exemptions from filing but cannot go into the detailed information that these documents must contain - for this see the Companies Act. Accounts must be produced to a standard that we can scan to reproduce electronically - see chapter 5. Directors are personally responsible for ensuring that accounts are prepared and delivered to Companies House. Failure to do so may result in a criminal conviction and record for the director(s) and will result in financial penalties for the company. 2. Annual returns (Form 363) Every company must deliver an annual return to Companies House at least once every 12 months. It has 28 days from the date to which the return is made up to do this. To help you meet this filing requirement we will send a letter to the company’s registered office when your annual return is due. It advises on how to file the form electronically by using our Software Filing or WebFiling services as this is the easiest option.
However if you do not have the facility to file online you can order a paper copy of the annual return form via our Contact Centre on 0870 33 33 636.
Also, if your company is in compulsory liquidation or you wish to file in Welsh, electronic filing may be unavailable to your company. For advice on remaining company types that are unable to file online please visit our website www.companieshouse.gov.uk. In this case a paper form will be issued to the registered office.
There is an annual document-processing fee of £30 (or £15 for users of our Software Filing or WebFiling services), which must be paid with the annual return.If you file the annual return late or not at all, the company and its director(s) and secretary can be prosecuted. Please note that annual returns are quite separate from annual accounts. For more information about how to complete an annual return, refer to our 'Annual Return' booklet. 3. Change of accounting reference date - Form 225 Every company has an accounting reference date, which is the date to which the company's accounts are prepared each year. This date can be changed using Form 225. For more information, see our 'Accounts and Accounting Reference Dates' booklet. 4. Change of registered office - Form 287 It is vital that you keep us informed of the location of your registered office. All formal communications are sent there. Every company must have a registered office: it is the 'home' of the company to which all official documents, notices and court papers have to be sent by law. The address must be a physical location, not just a post office box. This is because people have the right to visit your office to inspect certain registers and documents, and to deliver documents by hand. You can change your registered office address by sending a completed Form 287 to the Registrar. The change becomes legally effective only when we have registered the form. 5. Change of directors and secretary and their details - Forms 288 There are three types of Form 288.
Form 288(a) is used for the appointment of an officer.
Form 288(b) is used for an officer ceasing to act (resignation, removal, death etc).
Form 288(c) is used for a change in details of an officer, for example, a change of name or new residential address. All changes to directors' and secretary's details must be sent to the Registrar within 14 days of the change.
Electronic delivery of directors' details and registered office address:The Registrar’s PROOF (PROtected On-line Filing) Scheme
Company directors hold an important position in a company: they have power to make purchases and enter into credit arrangements on behalf of the company. Similarly, the registered office address is important because it is the address to which all official communications will be sent.
Records held at Companies House are sometimes used to check the legitimacy of a company and its directors before credit or loans are made therefore it is important that the records are correct. Companies are vulnerable to fraud if the wrong people get themselves on record as company directors or a bogus registered office address is filed.
In order to combat fraudsters posing as legitimate directors, Companies House offers companies a fully electronic and secure system for notifying changes of directors and changes to the registered office address. If you opt to only notify these electronically, they will be protected by electronic codes and we will not accept notices from your company delivered in any other format.
In order to take advantage of this service you will first need to register through our WebFiling service for a security code and an authentication code to enable your company to file electronically. To find out more about this please visit our web site at www.companieshouse.gov.uk.
You will then need to complete an ‘Opt-in’ form (PR1) and agree to the terms and conditions so that any change of directors or change of registered office address are only accepted by Companies House it they are delivered by the secure electronic method and never on a paper form. The ‘Opt-in’ form and terms and conditions are available from our web site or by calling 0870 33 33 636. The completed form must be posted back to Companies House.
This service is voluntary; you may opt-out at any time and we will revert to accepting notices from your company delivered electronically or on paper forms.6. Allotments of shares - Form 88(2) This form should be sent to Companies House within one month of the shares being allotted. Our booklet, 'Share Capital and Prospectuses' gives more information about this. 7. Resolutions Copies of any special or extraordinary resolutions and certain types of ordinary resolutions, need to be sent to Companies House within 15 days of them being passed by the company - our booklet, 'Resolutions', gives more information about this. When a resolution alters the memorandum or articles of a company, a copy of the amended document must also be sent in at the same time as the resolution . There is no special form to complete but the document must be produced to a standard that we can scan and reproduce electronically - see Chapter 5. 8. Mortgages and charges Details of any mortgage or charge created by the company must be sent to Companies House within 21 days. See our booklet, 'Company Charges and Mortgages' or 'Company Charges (Scotland)'. Back to top CHAPTER 5Quality of documents 1. What happens to documents sent to Companies House? The documents and forms you deliver to Companies House are scanned to produce an electronic image. The original documents are then stored, and the electronic image is used as the working document. When your business contacts view the company record, they see the electronic image reproduced on-line. So it is important not only that the original is legible, but that it can also produce a clear copy. This chapter lays down a few quality guidelines to follow when preparing a document for filing at Companies House. 2. What happens if my documents do not meet the guidelines? Section 706 of the Act allows Companies House to reject documents that cannot be captured electronically, giving a notice saying why they are unacceptable. An acceptable copy must be delivered within 14 days of the notice (otherwise we treat the original as not having been delivered). 3. How should documents be set out? Every document delivered to the Registrar must state in a prominent position the registered number of the company, and must comply with any requirements specified by the Registrar relating to the legibility of that document. Briefly, documents should be on A4 size, plain white paper between 80gsm and 100gsm in weight with a matt finish. Text should be black, clear, legible, and of uniform density. Letters and numbers must not be less that 1.8mm high, with a line width of not less than 0.25mm.
When you fill in a form:
use black ink or black type;
use bold lettering (some elegant thin typefaces and pens give poor quality copies);
don't send a carbon copy;
don't use a dot matrix printer; and
remember - photocopies can result in a grey shade that will not scan well. When you complete other documents, please remember:
the points already made relating to completing forms;
to use A4 size paper with a good margin;
to supply them in portrait format (that is with the shorter edge across the top);
to include the company number in the top right-hand corner of the first page. Important: coloured ink can drop out (disappear) when a document is scanned to produce an image. To prevent this - always use black ink to complete and sign all documents. 4. What are the most common problems to avoid? Glossy accountsIf you are producing colour-printed glossy accounts, please save them for your shareholders and others who will appreciate them. We still need black on white with a matt finish. A typed unbound version or printer's proof is ideal, provided it has the necessary signatures. Members listsOur requirements on document quality apply equally to the lists of shareholders that accompany annual returns and allotment forms. If these are computer prints, it is essential that the print quality is good. We have particular problems with lists printed on green-lined computer paper. We can handle members lists on paper up to 14.5" x 12". We will accept documents delivered on certain types of computer-generated microfiche (comfiche) on a black master - as an alternative to paper - provided we can duplicate them on our diazo machines. We may also be able to accept magnetic tape for very large listings. 5. Can I find out more about this? For further guidance on print requirements contact 0870 33 33 636.Back to top CHAPTER 6Further information 1. Can I use information from Companies House? Yes. Company information is vital to informed decision-making. At Companies House you'll find information on every company in Great Britain, from names and addresses to annual returns and accounts. But note that most unlimited companies do not have to file their accounts. You can also get information about oversea companies that establish a place of business in this country or open a branch here. You can order a company search by telephoning 0870 3333636 or by visiting any of our offices. 2. How do I send information to the Registrar?
The safest and most secure way to send statutory information to Companies House is to use our online filing services. For more information and registration details please visit our website www.companieshouse.gov.uk
You may deliver documents to the Registrar by hand (personally or by courier), including outside office hours, bank holidays and weekends to Cardiff, London and Edinburgh. You may also send documents by post or by the Document Exchange service (DX). If you send documents, please address them to:
For companies incorporated inEngland & Wales:
For companies incorporated inScotland:
The Registrar of CompaniesCompanies HouseCrown WayCardiff CF14 3UZDX33050 Cardiff
The Registrar of CompaniesCompanies House37 Castle TerraceEdinburgh EH1 2EBDX ED235 Edinburgh 1If you are sending documents by post, courier or Document Exchange (DX) and would like a receipt, Companies House will provide an acknowledgement if you enclose a copy of your covering letter with a pre-paid addressed return envelope. We will barcode your copy letter with the date of receipt and return it to you in the envelope provided.
Please note: an acknowledgement of receipt does not mean that a document has been accepted for registration at Companies House.
Please note: Companies House does not accept accounts or any other statutory documents by fax.
3. Can I file documents in other languages?
Generally documents sent to the Registrar must be filed in English. However, documents relating to Welsh companies may be drawn up and delivered in Welsh.
From the 1 st January 2007, companies may deliver the following documents in other languages if the document is accompanied by a certified translation into English:
Resolutions and agreements affecting a company’s constitution
Contracts allotting shares for a consideration other than cash
For companies included in accounts of larger EEA or non-EEA groups, the group accounts and parent undertaking annual report
Charge instruments (or copy charge instruments)
From the 1 st January 2007, companies may also file voluntary certified translations of any document subject to the Directive disclosure requirements. This includes:
Constitutional documents such as the memorandum and articles of association
Directors appointments, changes in particulars or resignations
Accounts, reports and annual returns
Notification of any change in a company’s registered office
Winding up documents
Share capital documents (public companies only)
Documents relating to mergers and divisions (public companies only)
Documents relating to overseas companies
The voluntary translation must relate to a document delivered to the registrar on or after 1 st January 2007. Voluntary translations can only be filed in an official language of the European Union and must be accompanied by Form 1106.
4. Where do I get forms and guidance booklets? This is one of a series of Companies House booklets which provide a simple guide to the Companies Act. Statutory forms and guidance booklets are available, free of charge from Companies House. The quickest way to get them is through this website or by telephoning 0870 3333636. If you prefer you can write to our stationery sections in Cardiff or Edinburgh. Forms can also be obtained from legal stationers, accountants, solicitors and company formation agents - addresses in business phone books.
© Crown copyright 2003
copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.companieshouse.gov.uk
August 2007 version 13
Contents
Introduction
Limited companies: the basics
Role of a company director
Role and duties of a company secretary
What you have to send to Companies House
Quality of documents
Further information
This is a guide only and should be read with the relevant legislation.Back to top Introduction All companies must have officers. This means at least one director and a company secretary for a private limited company, and at least two directors and a company secretary for a public limited company. The director, or directors, must manage the company's affairs in accordance with its articles of association and the law. Certain responsibilities apply to all directors, whether executive or non-executive, and to all types of company whether trading or not. The company secretary is the chief administrator of the company.
This guide:
explains some of the main responsibilities of a company's officers; and
deals with some of the key requirements of the Companies Act 1985 in relation to the delivery of documents to Companies House. When we refer to 'the Act' in this booklet, we mean the 1985 Companies Act (as amended in 1989 and later). The guide will not tell you everything about being a director or secretary, but it will give you a good idea of your responsibilities as they relate to Companies House. If, after reading this guide, you are in doubt about your responsibilities, you should seek professional advice from a solicitor or accountant. Back to top CHAPTER 1Limited companies: the basics 1. Do I really need a limited company? The majority of businesses are not companies. The reasons for having a company are varied, for example, it could involve ownership of property, obtaining investment funds, taxation or contractual relationships. Many businesses function satisfactorily as sole traders or partnerships. The key point to recognise is that a company is a separate entity.
This means that it is a legal person in its own right.
It is separate from those who own or run it, and has 'limited liability'. 2. What does limited liability mean? Limited liability gives the owners of the company (its shareholders) protection if the company fails. This means that if a company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts. 3. How do I set up a limited company? If you decide, maybe after taking professional advice, that a limited company is the best thing for your business, you can buy a ready-made company from a company incorporation agent. Alternatively, you can incorporate a company yourself - for details see our booklets, 'Company Formations' and 'Company Names'. 4. What can I do with an unwanted company? If you decide that you do not need a company that you have set up, you should consider putting it into voluntary liquidation. If the company cannot afford this, you may be able to apply for it to be struck off the register. Our guidance booklets 'Liquidation and Insolvency' or 'Liquidation and Insolvency (Scotland)' and 'Strike-off, Dissolution and Restoration' or 'Strike-off, Dissolution and Restoration (Scotland)', will give you more information on these subjects.Back to top CHAPTER 2Role of a company director 1. Can anyone be a director? Generally it is up to the members to appoint the people they believe will run the company well on their behalf.
The only restrictions that prevent anyone becoming a director are:
the person must not have been disqualified by a court from acting as a company director (unless he or she has been given leave (permission) to act by a court for a particular company);
the person must not be an undischarged bankrupt (except with leave of the court);
in Scotland, anybody under the age of 16 2. What responsibilities does a director have towards Companies House? Every company director has a personal responsibility to ensure that statutory documents are delivered to the Registrar as and when required by the Act. In particular:
accounts (only for limited companies);
annual returns (Form 363);
notice of change of directors or secretaries or in their particulars (Forms 288a/b/c); and
notice of change of registered office (Form 287). Chapter 4 summarises what a limited company has to send to Companies House. 3. What happens if accounts or annual returns are not filed? All the directors of the company could be prosecuted. Failure to deliver documents on time is a criminal offence. On conviction, a director could end up with a criminal record and a fine of up to £5,000 for each offence. Alternatively, if the Registrar believes that the company is no longer carrying on business or in operation, he could strike it off the register and dissolve it. If this happens all the assets of the company, including its bank account and property, generally become the property of the Crown. The company can only be restored to the register and continue in existence by means of a court order. See our booklet, 'Strike-off, Dissolution and Restoration' or 'Strike-off, Dissolution and Restoration (Scotland)', for details. 4. Are directors really prosecuted? Yes. On average more than 1,000 directors are prosecuted each year for failing to deliver accounts and returns to the Registrar on time. Persistent failure to deliver statutory documents on time may also lead to a director being disqualified from taking part in the management of a company, for a specified period. 5. What happens if accounts are delivered late? As a director of a private limited company, you normally have a maximum of 10 months from the accounting reference date in which to deliver your company's accounts to the Registrar. The accounting reference date is the date to which your accounts must be prepared. As a director of a public limited company, you normally have a maximum of 7 months from the accounting reference date in which to deliver your company's accounts to the Registrar.
Important if your company's first accounts cover a period of more than 12 months, they must reach Companies House within 22 months of the date of incorporation for private companies and 19 months for public companies. If accounts are received late, the company will automatically be charged a 'late filing penalty'. These penalties can be in addition to any fine imposed by a court - as explained in question 3 of this chapter. The late filing penalty will be calculated according to the following scale:
Length of delay
Privatecompany
Publiccompany
3 months or less
£ 100
£ 500
3 months one day to 6 months
£ 250
£1000
6 months one day to 12 months
£ 500
£2000
More than 12 months
£1000
£5000
See our booklet, 'Late Filing Penalties', for details. 6. How can prosecution and penalties be avoided? Make sure your company complies on time with all its filing obligations, not only in connection with its accounts and annual returns, but in connection with all other documents required under the Act. 7. Isn't my accountant supposed to do all this? Your accountant's responsibilities depend on the agreement you have with him or her. However, the responsibility to deliver accounts and other statutory documents rests entirely with the directors. Ensure that your accountants have all the necessary information to prepare your accounts and get them audited on time. If necessary, chase your accountants. Don't just assume they are getting on with the job.
Accountants and financial advisers don't get prosecutedor penalised for late filing.You do! 8. Why does Companies House need this information? In exchange for the benefits of trading with limited liability, companies must deliver certain information about themselves to the Registrar. He must then make this information available for inspection by the public so that they can make informed decisions about companies that they may wish to invest in or do business with.
Remember, delivery of documents does not take place until they reach the Registrar. Back to top CHAPTER 3Role and duties of a company secretary 1. Does every company need a secretary? Yes. Section 283(1) of the Act says every company must have a secretary. Section 283(2) states that a sole director cannot also be the secretary. 2. Does a company secretary need any qualifications? The company secretary of a public limited company needs to be qualified as explained below. The company secretary of a private limited company needs no formal qualifications. Section 286 of the Act (qualifications of company secretaries) says that the directors of a public limited company must make sure, as far as reasonably possible, that the secretary, or each joint secretary, is a person who appears to them to have the proper knowledge and experience to carry out the functions of company secretary.
In addition, the secretary must also be a person who:
is a member of any of the following bodies: the Institute of Chartered Accountants in England and Wales; the Institute of Chartered Accountants of Scotland;the Institute of Chartered Accountants in Ireland; the Chartered Association of Certified Accountants; the Institute of Chartered Secretaries and Administrators; the Chartered Institute of Management Accountants; the Chartered Institute of Public Finance and Accounting; or
have held the office of secretary (or assistant or deputy secretary) of the company on 22 December 1980; or
have held the office of company secretary of a company (except a private company) for at least 3 out of the 5 years immediately before his or her appointment as secretary; or
is a barrister, advocate or solicitor called or admitted in any part of the UK; or
is a person who appears to the directors to be capable of carrying out the functions of company secretary, because he or she holds, or has held, any other similar position or is a member of any other body. 3. What are the duties of a company secretary? They are not specified by the Act, but are usually contained in an employment contract. Special duties As the secretary is an officer of the company under section 744 of the Act, they may be criminally liable for defaults committed by the company. For example failure to file - in the time allowed - any change in the details of the company's directors and secretary, and the company's annual return. The secretary may also have to make out a statement of the company's affairs if an administrative receiver or a provisional liquidator is appointed, or if a winding-up order is made. (Sections 47 (Section 66 for Scotland) and 131 of the Insolvency Act 1986.) Other duties The company secretary usually undertakes the following duties: (a) Maintaining the statutory registers.
These are:
the register of members (section 352);
the register of directors and secretaries (section 288);
the register of directors' interests (section 325);
the register of charges (section 407 or 422 for Scottish companies); and
for public companies only, the register of interests in shares (section 211). (b) Ensuring that statutory forms are filed promptly. You cannot simply send a letter to notify the Registrar that you wish to change the situation of the company's registered office or that changes have occurred among directors or secretaries or their particulars. You should normally use forms 287 and 288a, b or c as appropriate. You may also use the annual return Form 363s in some circumstances if the return is due at the convenient time. Changes of directors' and secretaries' details must be notified within 14 days. There are many other forms that need to be delivered to the Registrar. See Chapter 4, 'What you have to send to Companies House', for more information. (c) Providing members and auditors with notice of meetings. You must give them 21 days written notice of an annual general meeting. You must give them 14 days written notice of a meeting which is neither an annual general meeting or a meeting to pass a special resolution. If you are the secretary of an unlimited company, the written notice required is 7 days. (d) Sending the Registrar copies of resolutions and agreements. You must send the Registrar copies of every resolution or agreement to which section 380 applies, for example special and extraordinary resolutions, within 15 days of them being passed. (e) Supplying a copy of the accounts to every member of the company, every debenture holder and every person who is entitled to receive notice of general meetings - also copies demanded by anyone under section 239 of the Act. You must send accounts at least 21 days before a meeting at which they are to be laid - see section 238 of the Act. (f) Keeping, or arranging for the keeping, of minutes of directors' meetings and general meetings. (g) Ensuring that people entitled to do so can inspect company records. For example, members of the company and members of the public are entitled to a copy of the company's register of members, and members of the company are entitled to inspect the minutes of its general meetings and to have copies of these minutes. (h) Custody and use of the company seal. Companies no longer need to have a company seal, but if they do, the secretary is usually responsible for its custody and use. (Company seals can be bought from legal stationers and company formation agents.) 4. Does a company secretary have any powers? No, but the Act allows them to sign the following re-registration applications:
the re-registration of a limited company as unlimited - section 49(4) of the Act;
the re-registration of an unlimited company as limited - section 51(4);
the re-registration of a public company as a private company - section 53(1)(b); and
the re-registration of a private company as a public company - section 43(3). The secretary is also allowed to sign most of the forms prescribed under the Act. 5. What rights does a company secretary have? They depend on the terms of his or her contract with the company. The secretary has no special rights under the Act. Back to top CHAPTER 4What you have to send to Companies House Company directors and secretaries are responsible for delivering information to the Registrar. There are over 200 forms that companies could file. The following information deals only with the most common forms and documents that companies will use. 1. Accounts All limited companies, whether trading or not, must keep accounting records and file accounts for each accounting period with the Registrar. Unless a company is claiming exemption as a medium-sized, small, audit-exempt or dormant company, the accounts will include:
a directors' report* signed by a director or the company secretary;
a balance sheet signed by a director;
a profit and loss account (or income and expenditure account if the company is not trading for profit);
an auditors' report signed by the auditor;
notes to the accounts; and
group accounts (if appropriate).
* For accounting periods beginning on or after 01 October 2007, directors’ reports must contain a business review. This does not apply to companies that qualify as small.
Our booklet, 'Accounts and Accounting Reference Dates', provides more information on preparing and filing accounts and about exemptions from filing but cannot go into the detailed information that these documents must contain - for this see the Companies Act. Accounts must be produced to a standard that we can scan to reproduce electronically - see chapter 5. Directors are personally responsible for ensuring that accounts are prepared and delivered to Companies House. Failure to do so may result in a criminal conviction and record for the director(s) and will result in financial penalties for the company. 2. Annual returns (Form 363) Every company must deliver an annual return to Companies House at least once every 12 months. It has 28 days from the date to which the return is made up to do this. To help you meet this filing requirement we will send a letter to the company’s registered office when your annual return is due. It advises on how to file the form electronically by using our Software Filing or WebFiling services as this is the easiest option.
However if you do not have the facility to file online you can order a paper copy of the annual return form via our Contact Centre on 0870 33 33 636.
Also, if your company is in compulsory liquidation or you wish to file in Welsh, electronic filing may be unavailable to your company. For advice on remaining company types that are unable to file online please visit our website www.companieshouse.gov.uk. In this case a paper form will be issued to the registered office.
There is an annual document-processing fee of £30 (or £15 for users of our Software Filing or WebFiling services), which must be paid with the annual return.If you file the annual return late or not at all, the company and its director(s) and secretary can be prosecuted. Please note that annual returns are quite separate from annual accounts. For more information about how to complete an annual return, refer to our 'Annual Return' booklet. 3. Change of accounting reference date - Form 225 Every company has an accounting reference date, which is the date to which the company's accounts are prepared each year. This date can be changed using Form 225. For more information, see our 'Accounts and Accounting Reference Dates' booklet. 4. Change of registered office - Form 287 It is vital that you keep us informed of the location of your registered office. All formal communications are sent there. Every company must have a registered office: it is the 'home' of the company to which all official documents, notices and court papers have to be sent by law. The address must be a physical location, not just a post office box. This is because people have the right to visit your office to inspect certain registers and documents, and to deliver documents by hand. You can change your registered office address by sending a completed Form 287 to the Registrar. The change becomes legally effective only when we have registered the form. 5. Change of directors and secretary and their details - Forms 288 There are three types of Form 288.
Form 288(a) is used for the appointment of an officer.
Form 288(b) is used for an officer ceasing to act (resignation, removal, death etc).
Form 288(c) is used for a change in details of an officer, for example, a change of name or new residential address. All changes to directors' and secretary's details must be sent to the Registrar within 14 days of the change.
Electronic delivery of directors' details and registered office address:The Registrar’s PROOF (PROtected On-line Filing) Scheme
Company directors hold an important position in a company: they have power to make purchases and enter into credit arrangements on behalf of the company. Similarly, the registered office address is important because it is the address to which all official communications will be sent.
Records held at Companies House are sometimes used to check the legitimacy of a company and its directors before credit or loans are made therefore it is important that the records are correct. Companies are vulnerable to fraud if the wrong people get themselves on record as company directors or a bogus registered office address is filed.
In order to combat fraudsters posing as legitimate directors, Companies House offers companies a fully electronic and secure system for notifying changes of directors and changes to the registered office address. If you opt to only notify these electronically, they will be protected by electronic codes and we will not accept notices from your company delivered in any other format.
In order to take advantage of this service you will first need to register through our WebFiling service for a security code and an authentication code to enable your company to file electronically. To find out more about this please visit our web site at www.companieshouse.gov.uk.
You will then need to complete an ‘Opt-in’ form (PR1) and agree to the terms and conditions so that any change of directors or change of registered office address are only accepted by Companies House it they are delivered by the secure electronic method and never on a paper form. The ‘Opt-in’ form and terms and conditions are available from our web site or by calling 0870 33 33 636. The completed form must be posted back to Companies House.
This service is voluntary; you may opt-out at any time and we will revert to accepting notices from your company delivered electronically or on paper forms.6. Allotments of shares - Form 88(2) This form should be sent to Companies House within one month of the shares being allotted. Our booklet, 'Share Capital and Prospectuses' gives more information about this. 7. Resolutions Copies of any special or extraordinary resolutions and certain types of ordinary resolutions, need to be sent to Companies House within 15 days of them being passed by the company - our booklet, 'Resolutions', gives more information about this. When a resolution alters the memorandum or articles of a company, a copy of the amended document must also be sent in at the same time as the resolution . There is no special form to complete but the document must be produced to a standard that we can scan and reproduce electronically - see Chapter 5. 8. Mortgages and charges Details of any mortgage or charge created by the company must be sent to Companies House within 21 days. See our booklet, 'Company Charges and Mortgages' or 'Company Charges (Scotland)'. Back to top CHAPTER 5Quality of documents 1. What happens to documents sent to Companies House? The documents and forms you deliver to Companies House are scanned to produce an electronic image. The original documents are then stored, and the electronic image is used as the working document. When your business contacts view the company record, they see the electronic image reproduced on-line. So it is important not only that the original is legible, but that it can also produce a clear copy. This chapter lays down a few quality guidelines to follow when preparing a document for filing at Companies House. 2. What happens if my documents do not meet the guidelines? Section 706 of the Act allows Companies House to reject documents that cannot be captured electronically, giving a notice saying why they are unacceptable. An acceptable copy must be delivered within 14 days of the notice (otherwise we treat the original as not having been delivered). 3. How should documents be set out? Every document delivered to the Registrar must state in a prominent position the registered number of the company, and must comply with any requirements specified by the Registrar relating to the legibility of that document. Briefly, documents should be on A4 size, plain white paper between 80gsm and 100gsm in weight with a matt finish. Text should be black, clear, legible, and of uniform density. Letters and numbers must not be less that 1.8mm high, with a line width of not less than 0.25mm.
When you fill in a form:
use black ink or black type;
use bold lettering (some elegant thin typefaces and pens give poor quality copies);
don't send a carbon copy;
don't use a dot matrix printer; and
remember - photocopies can result in a grey shade that will not scan well. When you complete other documents, please remember:
the points already made relating to completing forms;
to use A4 size paper with a good margin;
to supply them in portrait format (that is with the shorter edge across the top);
to include the company number in the top right-hand corner of the first page. Important: coloured ink can drop out (disappear) when a document is scanned to produce an image. To prevent this - always use black ink to complete and sign all documents. 4. What are the most common problems to avoid? Glossy accountsIf you are producing colour-printed glossy accounts, please save them for your shareholders and others who will appreciate them. We still need black on white with a matt finish. A typed unbound version or printer's proof is ideal, provided it has the necessary signatures. Members listsOur requirements on document quality apply equally to the lists of shareholders that accompany annual returns and allotment forms. If these are computer prints, it is essential that the print quality is good. We have particular problems with lists printed on green-lined computer paper. We can handle members lists on paper up to 14.5" x 12". We will accept documents delivered on certain types of computer-generated microfiche (comfiche) on a black master - as an alternative to paper - provided we can duplicate them on our diazo machines. We may also be able to accept magnetic tape for very large listings. 5. Can I find out more about this? For further guidance on print requirements contact 0870 33 33 636.Back to top CHAPTER 6Further information 1. Can I use information from Companies House? Yes. Company information is vital to informed decision-making. At Companies House you'll find information on every company in Great Britain, from names and addresses to annual returns and accounts. But note that most unlimited companies do not have to file their accounts. You can also get information about oversea companies that establish a place of business in this country or open a branch here. You can order a company search by telephoning 0870 3333636 or by visiting any of our offices. 2. How do I send information to the Registrar?
The safest and most secure way to send statutory information to Companies House is to use our online filing services. For more information and registration details please visit our website www.companieshouse.gov.uk
You may deliver documents to the Registrar by hand (personally or by courier), including outside office hours, bank holidays and weekends to Cardiff, London and Edinburgh. You may also send documents by post or by the Document Exchange service (DX). If you send documents, please address them to:
For companies incorporated inEngland & Wales:
For companies incorporated inScotland:
The Registrar of CompaniesCompanies HouseCrown WayCardiff CF14 3UZDX33050 Cardiff
The Registrar of CompaniesCompanies House37 Castle TerraceEdinburgh EH1 2EBDX ED235 Edinburgh 1If you are sending documents by post, courier or Document Exchange (DX) and would like a receipt, Companies House will provide an acknowledgement if you enclose a copy of your covering letter with a pre-paid addressed return envelope. We will barcode your copy letter with the date of receipt and return it to you in the envelope provided.
Please note: an acknowledgement of receipt does not mean that a document has been accepted for registration at Companies House.
Please note: Companies House does not accept accounts or any other statutory documents by fax.
3. Can I file documents in other languages?
Generally documents sent to the Registrar must be filed in English. However, documents relating to Welsh companies may be drawn up and delivered in Welsh.
From the 1 st January 2007, companies may deliver the following documents in other languages if the document is accompanied by a certified translation into English:
Resolutions and agreements affecting a company’s constitution
Contracts allotting shares for a consideration other than cash
For companies included in accounts of larger EEA or non-EEA groups, the group accounts and parent undertaking annual report
Charge instruments (or copy charge instruments)
From the 1 st January 2007, companies may also file voluntary certified translations of any document subject to the Directive disclosure requirements. This includes:
Constitutional documents such as the memorandum and articles of association
Directors appointments, changes in particulars or resignations
Accounts, reports and annual returns
Notification of any change in a company’s registered office
Winding up documents
Share capital documents (public companies only)
Documents relating to mergers and divisions (public companies only)
Documents relating to overseas companies
The voluntary translation must relate to a document delivered to the registrar on or after 1 st January 2007. Voluntary translations can only be filed in an official language of the European Union and must be accompanied by Form 1106.
4. Where do I get forms and guidance booklets? This is one of a series of Companies House booklets which provide a simple guide to the Companies Act. Statutory forms and guidance booklets are available, free of charge from Companies House. The quickest way to get them is through this website or by telephoning 0870 3333636. If you prefer you can write to our stationery sections in Cardiff or Edinburgh. Forms can also be obtained from legal stationers, accountants, solicitors and company formation agents - addresses in business phone books.
© Crown copyright 2003
copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.companieshouse.gov.uk
Vat Requirements.
Vat Requirements
Information and Guides
Use the categories below to browse our VAT publications. They include introductory guides on key topic areas, detailed guidance from Public Notices as well as information sheets and business briefings.
This page contains links to only a selection of the most popular material. If you cannot see exactly what you are looking for, try searching for all VAT publications in our Library.
Introduction to VAT
This is a summary of the most common VAT issues and a good place to start finding out how it affects you and your business.
Managing your VAT
Includes guidance on setting up and keeping VAT records, details of common errors made, and help if you have payment problems. Information on Motor Trade issues is also available.
Penalties, Judgements and Appeals
Advice on how to avoid penalties and surcharges and information on appeal and judgement procedures.
Registering for VAT
Registering for VAT is compulsory for some companies and voluntary for others. Find out how your business fits the bill and how to get registered.
Special Schemes & Options
We have a range of special schemes and options to simplify VAT for small businesses. See if you qualify for a flat rate scheme or would prefer to spread your payments over fixed, monthly installments.
VAT for Travellers
If you are a visitor to the UK, or spend long periods abroad, there are special rules and schemes you need to know about.
VAT & International Trade
There are import rules and procedures for dealing with VAT on international trade. See this section for relevant material.
© Crown copyright
copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.opsi.gov.uk/
Information and Guides
Use the categories below to browse our VAT publications. They include introductory guides on key topic areas, detailed guidance from Public Notices as well as information sheets and business briefings.
This page contains links to only a selection of the most popular material. If you cannot see exactly what you are looking for, try searching for all VAT publications in our Library.
Introduction to VAT
This is a summary of the most common VAT issues and a good place to start finding out how it affects you and your business.
Managing your VAT
Includes guidance on setting up and keeping VAT records, details of common errors made, and help if you have payment problems. Information on Motor Trade issues is also available.
Penalties, Judgements and Appeals
Advice on how to avoid penalties and surcharges and information on appeal and judgement procedures.
Registering for VAT
Registering for VAT is compulsory for some companies and voluntary for others. Find out how your business fits the bill and how to get registered.
Special Schemes & Options
We have a range of special schemes and options to simplify VAT for small businesses. See if you qualify for a flat rate scheme or would prefer to spread your payments over fixed, monthly installments.
VAT for Travellers
If you are a visitor to the UK, or spend long periods abroad, there are special rules and schemes you need to know about.
VAT & International Trade
There are import rules and procedures for dealing with VAT on international trade. See this section for relevant material.
© Crown copyright
copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.opsi.gov.uk/
Bankruptcy > Alternatives to bankruptcy
Bankruptcy > Alternatives to bankruptcy.
It may be better for both you and your creditors to use one of the alternative procedures set out below instead of bankruptcy.
Business Link has an online diagnostic tool which may help you with deciding the best approach for dealing with your debts. Although the tool is primarily aimed at those who are self employed it can be used by anyone and can be accessed on the link below
Business Link Diagnostic Tool
a. An informal arrangement or "family arrangement"
If you know that you cannot pay all your debts, you could consider writing to your individual creditors to see if you can reach some compromise. Include a timetable of when you will repay them. The disadvantage with an informal arrangement is that it is not legally binding so your creditors could ignore it later and ask you to pay in full. Your local Citizens Advice Bureau can advise and help you make this kind of arrangement.
b. Administration orders
If one or more of your creditors has obtained a court judgment against you, the county court may make an administration order. Administration is a court-based procedure whereby you make regular payments to the court to pay towards what you owe your creditors. Your total debts must not be more than £5,000 and you will need enough regular income to make weekly or monthly repayments. You do not have to pay a fee for an administration order but the court will take a small percentage from the money you pay towards its costs. If you do not pay regularly, the order could be cancelled and you may become subject to the same restrictions as someone who is bankrupt. If your circumstances change and you cannot pay as ordered, you can apply to the court to change the order. The court which made the order will tell you what to do. Details of administration orders are available at your local county court.
c. Individual voluntary arrangements
This is a formal version of the arrangement described at (a). An individual voluntary arrangement begins with a formal proposal to your creditors to pay part or all of your debts. You need to apply to the court and you must be helped by an insolvency practitioner. Any agreement reached with your creditors will be binding on them.
How does it work?
· First, find an authorised insolvency practitioner prepared to act for you. (Your local court can give the names of local practitioners.) A list is also available for you to look at in your local Official Receiver’s office.
· Then you apply to the court for an "interim order". This prevents your creditors from presenting, or proceeding with, a bankruptcy petition against you while the interim order is in force. It also prevents them from taking other action against you during the same period without the permission of the court.
· The insolvency practitioner tells the court the details of your proposal and whether in his or her opinion a meeting of creditors should be called to consider it.
· If a meeting is to be held, the date of the meeting and details of the proposals are sent to your creditors. Only those creditors who had notice of the meeting are bound by the arrangement, so it is important that you have accurate records of all your creditors’ names and addresses. Otherwise, the arrangement might fail because the practitioner cannot contact all the creditors and, therefore, bind them to it.
· At the meeting, the creditors vote on whether to accept your proposals. If enough creditors (over 75% in value of the creditors present in person or by proxy, and voting on the resolution) vote in favour, the proposals are accepted. They are then binding on all creditors who had notice of, and were entitled to vote at, the meeting.
· The insolvency practitioner supervises the arrangement and pays the creditors in accordance with the accepted proposal.
What will an individual voluntary arrangement cost?
You should ask several practitioners what they charge before you ask any of them to act for you. Insolvency practitioners are usually accountants, some are solicitors and their fees are similar to those charged by members of these professions for other kinds of work.
When can you make an individual voluntary arrangement?
It is better and cheaper for you to set up an individual voluntary arrangement before you become bankrupt but you can propose one afterwards. If you do propose an individual voluntary arrangement after bankruptcy, it is possible for you to nominate the Official Receiver to be the supervisor of the arrangement. This type of arrangement is called a fast-track voluntary arrangement and is only suitable in certain cases (a separate publication called 'Fast-track voluntary arrangements' is available from your local Official Receiver’s office).
Are there any restrictions?
Generally speaking no, but the court cannot make an interim order if you have applied for one in the previous 12 months. There is no maximum or minimum level of debt and no maximum or minimum level of repayments, except what is acceptable to your creditors. An arrangement might particularly suit you if:
· you have friends or relatives prepared to help pay or contribute towards paying your debts;
· your income enables you to pay regular sums to creditors.
What are the advantages of an individual voluntary arrangement compared to going bankrupt?
· It gives you more say in how your assets are dealt with and how payments are made to creditors. You may be able to persuade your creditors to allow you to retain certain assets (such as your home). You will obviously have to act responsibly and flexibly in order to reach agreement with your creditors.
· You avoid the restrictions which apply to a bankrupt (see section 10).
· Because you will not have to pay some of the fees and expenses which are charged in a bankruptcy, the overall costs are likely to be less.
Can an individual voluntary arrangement be proposed by a member of a partnership?
Yes. You can propose an individual voluntary arrangement on your own which must take into account the claims that the creditors of the partnership have against you personally. It will not affect the rights of the partnership creditors to take action against the partnership itself or against any other partner.
Alternatively, you and your partner(s) may wish to propose an arrangement involving the partnership creditors and the personal creditors of the partners. This can be done in two ways:
· the partners may propose interlocking voluntary arrangements, with each partner making proposals for their own debts and the debts of the partnership; or
· the partnership may propose a partnership voluntary arrangement (usually accompanied by voluntary arrangements for each partner).
An authorised insolvency practitioner must help you to make proposals to creditors. He or she will be able to advise you which procedure to follow.
Warning: If you enter a voluntary arrangement but fail to give full details of your assets and debts or fail to do what you have agreed under the arrangement, then the insolvency practitioner, or any creditor bound by it, may still petition for your bankruptcy
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk/
It may be better for both you and your creditors to use one of the alternative procedures set out below instead of bankruptcy.
Business Link has an online diagnostic tool which may help you with deciding the best approach for dealing with your debts. Although the tool is primarily aimed at those who are self employed it can be used by anyone and can be accessed on the link below
Business Link Diagnostic Tool
a. An informal arrangement or "family arrangement"
If you know that you cannot pay all your debts, you could consider writing to your individual creditors to see if you can reach some compromise. Include a timetable of when you will repay them. The disadvantage with an informal arrangement is that it is not legally binding so your creditors could ignore it later and ask you to pay in full. Your local Citizens Advice Bureau can advise and help you make this kind of arrangement.
b. Administration orders
If one or more of your creditors has obtained a court judgment against you, the county court may make an administration order. Administration is a court-based procedure whereby you make regular payments to the court to pay towards what you owe your creditors. Your total debts must not be more than £5,000 and you will need enough regular income to make weekly or monthly repayments. You do not have to pay a fee for an administration order but the court will take a small percentage from the money you pay towards its costs. If you do not pay regularly, the order could be cancelled and you may become subject to the same restrictions as someone who is bankrupt. If your circumstances change and you cannot pay as ordered, you can apply to the court to change the order. The court which made the order will tell you what to do. Details of administration orders are available at your local county court.
c. Individual voluntary arrangements
This is a formal version of the arrangement described at (a). An individual voluntary arrangement begins with a formal proposal to your creditors to pay part or all of your debts. You need to apply to the court and you must be helped by an insolvency practitioner. Any agreement reached with your creditors will be binding on them.
How does it work?
· First, find an authorised insolvency practitioner prepared to act for you. (Your local court can give the names of local practitioners.) A list is also available for you to look at in your local Official Receiver’s office.
· Then you apply to the court for an "interim order". This prevents your creditors from presenting, or proceeding with, a bankruptcy petition against you while the interim order is in force. It also prevents them from taking other action against you during the same period without the permission of the court.
· The insolvency practitioner tells the court the details of your proposal and whether in his or her opinion a meeting of creditors should be called to consider it.
· If a meeting is to be held, the date of the meeting and details of the proposals are sent to your creditors. Only those creditors who had notice of the meeting are bound by the arrangement, so it is important that you have accurate records of all your creditors’ names and addresses. Otherwise, the arrangement might fail because the practitioner cannot contact all the creditors and, therefore, bind them to it.
· At the meeting, the creditors vote on whether to accept your proposals. If enough creditors (over 75% in value of the creditors present in person or by proxy, and voting on the resolution) vote in favour, the proposals are accepted. They are then binding on all creditors who had notice of, and were entitled to vote at, the meeting.
· The insolvency practitioner supervises the arrangement and pays the creditors in accordance with the accepted proposal.
What will an individual voluntary arrangement cost?
You should ask several practitioners what they charge before you ask any of them to act for you. Insolvency practitioners are usually accountants, some are solicitors and their fees are similar to those charged by members of these professions for other kinds of work.
When can you make an individual voluntary arrangement?
It is better and cheaper for you to set up an individual voluntary arrangement before you become bankrupt but you can propose one afterwards. If you do propose an individual voluntary arrangement after bankruptcy, it is possible for you to nominate the Official Receiver to be the supervisor of the arrangement. This type of arrangement is called a fast-track voluntary arrangement and is only suitable in certain cases (a separate publication called 'Fast-track voluntary arrangements' is available from your local Official Receiver’s office).
Are there any restrictions?
Generally speaking no, but the court cannot make an interim order if you have applied for one in the previous 12 months. There is no maximum or minimum level of debt and no maximum or minimum level of repayments, except what is acceptable to your creditors. An arrangement might particularly suit you if:
· you have friends or relatives prepared to help pay or contribute towards paying your debts;
· your income enables you to pay regular sums to creditors.
What are the advantages of an individual voluntary arrangement compared to going bankrupt?
· It gives you more say in how your assets are dealt with and how payments are made to creditors. You may be able to persuade your creditors to allow you to retain certain assets (such as your home). You will obviously have to act responsibly and flexibly in order to reach agreement with your creditors.
· You avoid the restrictions which apply to a bankrupt (see section 10).
· Because you will not have to pay some of the fees and expenses which are charged in a bankruptcy, the overall costs are likely to be less.
Can an individual voluntary arrangement be proposed by a member of a partnership?
Yes. You can propose an individual voluntary arrangement on your own which must take into account the claims that the creditors of the partnership have against you personally. It will not affect the rights of the partnership creditors to take action against the partnership itself or against any other partner.
Alternatively, you and your partner(s) may wish to propose an arrangement involving the partnership creditors and the personal creditors of the partners. This can be done in two ways:
· the partners may propose interlocking voluntary arrangements, with each partner making proposals for their own debts and the debts of the partnership; or
· the partnership may propose a partnership voluntary arrangement (usually accompanied by voluntary arrangements for each partner).
An authorised insolvency practitioner must help you to make proposals to creditors. He or she will be able to advise you which procedure to follow.
Warning: If you enter a voluntary arrangement but fail to give full details of your assets and debts or fail to do what you have agreed under the arrangement, then the insolvency practitioner, or any creditor bound by it, may still petition for your bankruptcy
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk/
Companies Act 2006
Overview
The Companies Act 2006 (formerly the Company Law Reform Bill) received Royal Assent on 8th November 2006. The Act will effectively replace existing companies legislation with the exception of provisions relating to company investigations and community interest companies.
When will the Act come into force?
All parts of the Act will come into force by October 2009, but there will be early commencement of some of the provisions. Refer to the BERR website for latest developments which will be updated when there are any new announcements.
Click here for the BERR Companies Act 2006 web pages.
Government response to the consultation 'Working with Companies House' – A consultation document on the registrar’s rules and related provisions which will apply under the Companies Act 2006 - PDF (84k)
Response to the Consultation document: Section 453 Civil administrative penalties for the late delivery of company accounts ("late filing penalties") - PDF 30k
© Crown copyright 2003
copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.companieshouse.gov.uk/
The Companies Act 2006 (formerly the Company Law Reform Bill) received Royal Assent on 8th November 2006. The Act will effectively replace existing companies legislation with the exception of provisions relating to company investigations and community interest companies.
When will the Act come into force?
All parts of the Act will come into force by October 2009, but there will be early commencement of some of the provisions. Refer to the BERR website for latest developments which will be updated when there are any new announcements.
Click here for the BERR Companies Act 2006 web pages.
Government response to the consultation 'Working with Companies House' – A consultation document on the registrar’s rules and related provisions which will apply under the Companies Act 2006 - PDF (84k)
Response to the Consultation document: Section 453 Civil administrative penalties for the late delivery of company accounts ("late filing penalties") - PDF 30k
© Crown copyright 2003
copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.companieshouse.gov.uk/
What is bankruptcy ?
Bankruptcy > What is bankruptcy?
Bankruptcy is one way of dealing with debts you cannot pay.
The bankruptcy proceedings:
free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are shared out fairly among your creditors.
Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.
Further Information
This website contains various guidance publications regarding what happens in bankruptcy. You should pay particular attention to the following:
A guide to bankruptcyInformation about bankruptcy and its alternatives
When will my bankruptcy end?Information about how long your bankruptcy will last
What will happen to my home?Information about your home
What will happen to my pension?This publication only applies to bankruptcies where the petition was presented before 29 May 2000
Can my bankruptcy be cancelled?Information about getting your bankruptcy cancelled (annulled)
What happens when you are interviewed by the Official ReceiverInformation about the process and timescale of a bankruptcy or compulsory liquidation.
Bankruptcy Restrictions Orders
What will happen to my bank account
Dealing with Debt - How to petition for your own bankruptcy
For general enquiries on insolvency matters you can contact the Insolvency Service Insolvency Enquiry Line on 0845 602 9848; or email: Insolvency.Enquiryline@insolvency.gsi.gov.uk
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
Bankruptcy is one way of dealing with debts you cannot pay.
The bankruptcy proceedings:
free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are shared out fairly among your creditors.
Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.
Further Information
This website contains various guidance publications regarding what happens in bankruptcy. You should pay particular attention to the following:
A guide to bankruptcyInformation about bankruptcy and its alternatives
When will my bankruptcy end?Information about how long your bankruptcy will last
What will happen to my home?Information about your home
What will happen to my pension?This publication only applies to bankruptcies where the petition was presented before 29 May 2000
Can my bankruptcy be cancelled?Information about getting your bankruptcy cancelled (annulled)
What happens when you are interviewed by the Official ReceiverInformation about the process and timescale of a bankruptcy or compulsory liquidation.
Bankruptcy Restrictions Orders
What will happen to my bank account
Dealing with Debt - How to petition for your own bankruptcy
For general enquiries on insolvency matters you can contact the Insolvency Service Insolvency Enquiry Line on 0845 602 9848; or email: Insolvency.Enquiryline@insolvency.gsi.gov.uk
© Crown copyright 2006 copyright notice - Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland
Full details can be viewed at http://www.insolvency.gov.uk
Friday, February 8, 2008
Case Study
Case Studies:
Corner shop, losing around £1200 a week, Electric/Gas about to be disconnected, Water had been turned off, owed to creditors approx £33,000.
We successfully negionated a worrying VAT liabaility.
We succesfully negionated the return of the water supply, found new suppliers for the Electric and Gas even though a warrant had been issued for the disconnection of the Electric service.
We reduced the debt to £10,000 and made a one-off final settlement with creditors, found new more comepetitve agrangement for the services.
The business returned to profit and has now been sold.
Corner shop, losing around £1200 a week, Electric/Gas about to be disconnected, Water had been turned off, owed to creditors approx £33,000.
We successfully negionated a worrying VAT liabaility.
We succesfully negionated the return of the water supply, found new suppliers for the Electric and Gas even though a warrant had been issued for the disconnection of the Electric service.
We reduced the debt to £10,000 and made a one-off final settlement with creditors, found new more comepetitve agrangement for the services.
The business returned to profit and has now been sold.
We'll Get Your Business Back In Gear!
Overwhelmed by debt, looming bankruptcy or facing serious cash flow problems? Trying to avoid bankruptcy, CVA or even an IVA and feeling confused?
Here at Capital-Advantage we have a team of specialist advisors with years of experience to assist both companies and individuals. With our experts on hand to assist with bankruptcy advice and professional insolvency, even liquidation services, rest assured you can be free of financial worries today.
We have helped many businesses avoid bankruptcy and in turn resolved their financial problems.
We understand the stress of bankruptcy, vat problems, re-mortgage and liquidation can seem stressful. That's why we offer each client free confidential advice to help you back on the road to recovery.
Different users have sought our help from start-ups to directors of large companies and each one of them has returned to being in the black.
Overwhelmed by debt, looming bankruptcy or facing serious cash flow problems? Trying to avoid bankruptcy, CVA or even an IVA and feeling confused?
Here at Capital-Advantage we have a team of specialist advisors with years of experience to assist both companies and individuals. With our experts on hand to assist with bankruptcy advice and professional insolvency, even liquidation services, rest assured you can be free of financial worries today.
We have helped many businesses avoid bankruptcy and in turn resolved their financial problems.
We understand the stress of bankruptcy, vat problems, re-mortgage and liquidation can seem stressful. That's why we offer each client free confidential advice to help you back on the road to recovery.
Different users have sought our help from start-ups to directors of large companies and each one of them has returned to being in the black.
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