Safeguarding personal assets

I have just acquired two clients (a wife and husband partnership) who joined the pub trade 15 months ago. They took an unsecured loan to obtain the business, repayable over 5 years, and have bought into a 9yr tenancy agreement to rent the pub. The repayments on these 2 fixed overheads forms a major part of their monthly outgoings. They rent out their mortgaged 'home' and intend returning to it when their pub tenure finishes. The cost of the mortgage is covered by their rental income.

I received an email this morning from one of the partners expressing a concern that if the pub business fails would they be in jeopardy of loosing their house, AND would 'changing' to a Ltd company (or LLP) help prevent this? Their trade is seasonal and takings are 'significantly reduced' compared with the same period last year. Cash flow is a problem and they are struggling to cover expenses.

Your constructive thoughts on this situation would be greatly appreciated and any contributions 'outside the box', that may help clarify my thinking, would be much appreciated too!


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