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.
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 licensed Insolvency Practitioner.
Unfortunately, in some cases the rescue options are not viable and therefore consideration must be given to the available insolvency options.
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.
Creditors Voluntary Liquidation
By placing a company into Voluntary Liquidation, the directors are stating that the company is insolvent, and the business is no longer sustainable.
The company is therefore closed, assets are sold and distributions (if any) are made to the creditors. If these distributions do not cover the debts (or there are no distributions) the debts effectively die with the company.
Although this may seem an undesirable option for many directors it can be beneficial for both the company and its directors. As the process is voluntarily bought about by the director(s) it means they can keep a level of control about when the process is started and can give some consideration as to their future. The liquidation of a company does not necessarily mean the end of a viable business.
Members Voluntary Liquidation
A Members Voluntary Liquidation is a tax efficient way for a solvent company to be liquidated and closed.
It may be that a solvent company has come to the end of its natural life, or that the director(s) are retiring etc. However, they can also be used if the sale of the assets of a company will pay off all creditors in full and will leave at least £5,000 to be distributed to shareholders.
Compulsory Winding Up
This occurs when a company cannot afford to pay its debts and a creditor (or multiple creditors) take legal action in pursuit of the money owed. They can apply to Court for the company to be wound up. If this happens a liquidator will be appointed by the Court and they will close the company down with immediate effect.
Is Insolvency the end of the line?
Whilst Insolvency is a big step and can be very daunting it doesn’t have to mean the end of the line for your business.
If a company has failed, it does not necessarily mean that the underlying business is not viable. Therefore, it can be a case that an insolvency procedure could be used to deal with the failing company AND in turn save the viable business.
Insolvency doesn’t have to mean the end of everything and used in the correct way it can actually be a life line.
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.