Company Insolvency
Is your Company Insolvent and if so what should you do?
- The first step is to apply the insolvency test to assess if your company is insolvent.
- If your company is insolvent you need to be aware of your new legal responsibilities.
- You must have a clear strategy in place on how to protect your personal interests.
The quickest and easiest way to find out if your company is insolvent is to book a free and confidential consultation (video call or phone call) with one of our insolvency specialists.
Company Insolvency – The Smarter Way
We are Accountants and Business Advisors with a totally new approach to Company Insolvency
IT PROVIDES BETTER PROTECTION FOR DIRECTORS, HELPS TO MINIMISE YOUR PERSONAL LIABILITY AND GUIDES YOU THROUGH THE FULL INSOLVENCY PROCESS
When a Director asks us if their company is insolvent, unfortunately, it usually is
That’s because Directors know their own business, and whilst insolvency can be difficult to face up to, they understand the realities.
Here are some of the signs of insolvency:
- Not paying PAYE or VAT on time, or a growing HMRC debt
- Problems repaying your Bounce Back Loan or CBILS
- Suppliers always chasing you for payment
- Overdraft always at its limit
- Difficulties in obtaining new finance
If these are persistent problems then your company is probably insolvent and you need to take action.
The best way to find out where you stand and what your options are, is to book your free and confidential consultation.
The Technical Tests for Limited Company Insolvency
The point at which a company becomes insolvent is critically important, as this can be the point from which a Company Director can be held personally liable for some or all of the company’s debts
There are two basic tests for company insolvency, the balance sheet test and the cash flow test.
The Balance Sheet Test
The balance sheet test considers the value of a company’s liabilities in relation to it assets. If its liabilities are greater than its assets then the company can be said to be balance sheet insolvent.
The Cash Flow Test
The cash flow test assesses if the company can meet its outgoings in full as and when they fall due. Once a company struggles to pay its debts, overheads, and other trading outgoings, it is classed as cash flow insolvent.
If either or both of these scenarios exist then the company is deemed to be insolvent, and the insolvency legislation states that the company should cease trading
Get prepared for the Insolvency Process in advance. Too many Directors don't, and subsequently regret it
Click the link below for more information on insolvency, including our Smarter Insolvency Service.
If your company is insolvent or you think it may be, there's a new set of rules you need to consider
Here’s the hit list (not exhaustive)
Apply time to resolving the situation immediately
Get yourself prepared before appointing an insolvency practitioner
Resist the urge to inject any personal funds into the business
Be aware of possible court action from creditors (especially HMRC)
Put a clear strategy in place to minimise your personal liability
Get the facts on the dangers you face as a Director
Clearly identify the factors that will adversely impact you
Be aware in advance of your obligations during insolvency
If you're looking to get back in business, choose the best options
There’s a smarter way to protect yourself during the insolvency process and it starts with a conversation.
Our consultations are free for now. Book the call, it’s a conversation you’re likely to find invaluable.