Finding the right Insolvency Solution for you…
Although it may not seem like it, as a Director of a limited company, you have options in front of you despite your business being Insolvent. It helps if you have an over-view of all the options available, so you can have a better idea of the best path forward for you, and understand the terms advisors use before picking up the phone.
Your Company has a short term cash (1 year or so) flow issue
A Company Voluntary Arrangement is a way for your company to pay back it’s debts at an affordable monthly figure. It is not intended to be a way of solving very serious cash flow problems, but if you have an otherwise profitable business then your creditors may agree to accept a Voluntary Arrangement (and usually write off a chunk of their debt) on the basis that in the long term it will be more profitable for them than Liquidation would be.
If your Company has a long term cash flow problem
If there is just no way you can sensibly pay off a reasonable amount of your debt (more than 30% over 5 years) and continue to trade then Voluntary Liquidation is the path for you. The Company closes, and the creditors receive a payment (dividend) from the sale of assets (if there are any). This is by far the most popular solution for an Insolvent Company. There can usually start up a new company and trade again within a very short period of time.
If you don’t owe that much money and have few assets.
You may want to look at Dissolution as a path forward. If approached in the right way, it can be as powerful as Liquidation. Despite the myths, HMRC has supported Dissolution as an Insolvency solution since 2013, provided it is done correctly.
It is a lot lower cost that Liquidation and on lower debt levels works very effectively.
Administrative Receivership
You may have heard of Administration or Administrative Receivership, but it is not a solution to Insolvency in it’s own right. It is a process of protecting a company from any legal action, whilst an Insolvency Practitioner decides on the best way forward. As it is such a powerful mechanism to protect a company, it is quite restrictive on who can have it, so if you are even thinking about it, you need to be talking to us to make sure of all the legal implications.
How can we help
Unlike other Liquidation Companies, our entire service is geared towards helping you as much as possible, without breaking the law .