For directors of companies facing financial difficulties there isn’t a one size fits all solution.
There are many options available to directors and which one is the correct option very much depends on the company’s specific situation and the desired outcome. Options available can include; funding, restructuring or insolvency procedures.
The earlier a solution is sought the more options are available. Therefore, it is imperative that, as soon as issues are acknowledged, advice is sought from a licenced Insolvency Practitioner.
What can we do?
We work with you in order to obtain the best outcome for both you and your business. By speaking with you and reviewing the situation we can then advise you on your options and put forward a plan / strategy to give you the best chance to reach your desired outcome.
We offer a free, no obligation, review during which we can obtain the details of your individual circumstances and gain an understanding of your needs and requirements. This way we can tailor our advice specifically to you, remember, there is no one size fits all answer.
What are the options?
There are a number of different recovery options available to companies that are suffering financial distress. Below is a brief overview of some of the options:
By placing a company into Administration, it protects the company from further legal action and allows the director(s) (along with the Administrators) to formulate a plan to deal with the company’s issues.
There are three possible objectives which an Administration must look to achieve:
- To rescue the company as a going concern
- To achieve a better result for a company’s creditors than would be likely if the company were wound up
- Realising property in order to make a distribution to the company’s secured creditors
Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement is a formal repayment plan agreed between the company and its unsecured creditors. A CVA is a relatively common procedure and on average they last for a period of 5 years. After which time any outstanding unsecured debt is written off.
Whilst subject to a CVA creditors of the company cannot take any further legal action against the company and any fines, interest charges or late payment fees are stopped.
Time To Pay Arrangements (TTPA)
A Time To Pay Arrangement can be used to pay outstanding HMRC debts including Corporation Tax, PAYE and VAT. It is an informal repayment plan agreed between the company and HMRC. A TTPA allows the company to pay off the liabilities in instalments over a period of 6-12 months. TTPA’s can be difficult to secure and to stand any chance of success the company needs to have a proven track record with HMRC at making payments.
What if none of the options are right?
In some cases the above rescue options can’t/won’t work. If so, it may be that an insolvency option is needed in order to deal with the situation.
This is why it is important to take advice from a licenced Insolvency Practitioner as soon as an issue is identified to make sure the right steps are taken to give you the best chance of the best outcome.
We offer a free, no obligation, review during which we can look at your current situation, gain an understanding of your needs and requirements before advising you on your options.
We deal with companies of all sizes from all industry sectors so there won’t be a problem that we haven’t come across before.