What To Do If Your Company Is Insolvent
Insolvency occurs when your business can no longer afford to pay its debts. You may be facing problems with your cash-flow, your liability may exceed your assets, and you may be struggling to hold off your creditors any longer.
This is, without a doubt, a very stressful and difficult time for any business owner or director. However it is vitally important to take action quickly and speak to a company insolvency practitioner; as there are a range of company insolvency proceedings which can be used to manage the situation and solve your company debt problems. In many cases, your company can even be rescued and can continue trading.
Company Insolvency Proceedings
Company Voluntary Arrangement (CVA): A Company Voluntary Arrangement (CVA) is a legal agreement between your company and its creditors for payment of all, or part of, the company’s debts over an agreed period of time. It is essentially a payment plan. A qualified insolvency professional will conduct a review of your business and draft a realistic and fair proposal for your company to pay its creditors. They will then present this to your creditors for their acceptance. A CVA can save your company from liquidation and provide a way out of its debt.
Administration: Administration is a process whereby control of your company is handed over to an insolvency practitioner, who then formulates a detailed plan for the future of the company and its creditors. Administration allows contracts that the company holds to be preserved and stops all legal action against the company. Administration relieves the pressure on you from creditors straight away and allows for an orderly sale of the business or its assets. Administration can be used to rescue your company or to preserve the value key assets or the business as a whole.
To find out more about these company insolvency proceedings and whether they can be used to rescue your company, simply get in touch with us as soon as possible.
Liquidation: If there is no way to rescue your company from insolvency, then liquidation may be the best option. Liquidation is the formal process for ending a company. Liquidating or 'winding up’ a limited company stops it from doing business and employing people. The company will be removed from the register at Companies House and it will cease to exist. Liquidation can be a voluntary process, or is can be a compulsory court-ordered process. In either case, an insolvency practitioner takes control of all correspondence with your creditors, removing the stress and strain of the situation from you.
Speak to us as soon as possible to find out if liquidation is right for your business. Our insolvency consultants can advise you on the best steps for your business based on its specific circumstances.
What To Do Next
For more information on company insolvency and to discuss your options, simply get in touch with us. We can offer free information and advice over the phone, via email or Live Chat. Our experienced and highly qualified company insolvency practitioners can meet you at your office in complete confidentiality, assess your situation and come up with a tailored plan to deal with your company debt problems.
