The 5 Costly Mistakes Directors make during Company Insolvency
1
Allowing compulsory liquidation from a disgruntled creditor, the bank or HMRC to proceed
This may seem like an easy way to close the business but it will mean increased scrutiny of your conduct and financial transactions and a more robust approach to investigations and financial recovery against you, and should be avoided.
2
Trading whilst insolvent (wrongful trading and possible misfeasance)
This applies whether you are aware the company is insolvent or not and can make you personally liable for some or all of your company's debts. We'll show you how to avoid this risk to your personal assets.
3
Preference payments to a creditor, a lender holding a personal guarantee or a connected party
You can be held personally liable for any payments made, whilst the company is insolvent, which benefit one creditor over another, or benefits you personally. Find out how payments can be justified.
4
The full balance on an overdrawn Directors Loan Account
At the point of insolvency you become personally liable for the balance on an overdrawn Directors Loan Account. We'll show you how to minimise this liability.
5
The cost of losing out on beneficial business restart options
Many Directors miss out on the benefits of a Pre-pack administration or the opportunity to buy back key business assets at greatly reduced prices, when starting up in business again. Our Smarter Insolvency Service ensures these options are directly available to you.
If your company is insolvent, the rules change, and Directors must beware the pitfalls
- Your legal responsibilities as a Director change.
- The safety net of Limited Liability no longer applies.
- You can be held personally liable for some or all of your company’s debts.
Speak with one of our insolvency specialists and find out exactly where you stand, our consultations (video call or phone call) are free and totally confidential.
Do not walk blindly into the Insolvency Process - Many Directors have done so to their regret
If you’re prepared in advance, this can be a straightforward process, if not it can cost you in more ways than one.
Speak with one of our advisors and feel the difference in how we prioritise your best interests
So what is Company Insolvency?
There are two recognised tests for company insolvency
The Cash Flow Test (Liquidity Test)
A company is considered cash flow insolvent if it cannot pay its debts as they become due, even if it has assets. If a company has outstanding bills but lacks the cash to pay them, it fails the cash flow test.
The Balance Sheet Test (Solvency Test)
A company is deemed balance sheet insolvent if its liabilities (what it owes) exceed its assets (what it owns or what monies are due to it).
Your legal obligations as a Director change
If your company is insolvent or you even think it is insolvent then your legal duties as a Director change and you must prioritise the interest of the company’s creditors in your decision making. Failure to do so can make you personally liable for your company’s debts.
We know how difficult this can be for Company Directors
But don’t let the worry of what might happen stop you taking action, the quicker you act, the better your options.
We specialise in the options available to Directors facing company insolvency
Here’s what we do:
Recovery and Restructure
- If your company is viable and you want to take it forward, we have the expertise to help you achieve your goals.
- You’ll find our discussions supportive but frank and to the point, as we assess the viability of your business and the options available to you.
- Our strategic review will assess the practicalities of changing the current financial, operational, and if required, legal structure of your business to improve profitability, and cash flow.
- We provide these services to suit your preferences, as a one off project, or an ongoing consultancy service or through a Non-exec Director appointment.
Pre Pack Administration
- We put Directors in the driving seat by enabling a Pre Pack buy back of your insolvent company (or individual assets) without the existing debt burden.
- We’ll assess your strategic plan, financial projections and funding requirements and can assist with these if you don’t have them in place.
- Agreeing the right purchase price is obviously one of the most important parts of the process. We’ll help you avoid the mistakes many Directors make and show you how to negotiate and buy at the best possible price.
- We’ll introduce you to an insolvency practitioner with the right experience and positive approach to Pre Packs.
Company Liquidation
- We take the time to prepare you for what’s ahead to minimise any personal liability you may face.
- We’re here to look after your personal interests first and foremost, and will see you through the liquidation process from start to finish.
- We undertake the initial consultations and essential information gathering, conduct the financial assessment of your business and help you complete the Statutory Statement of Affairs.
- We introduce you to a known and trusted insolvency practitioner to administer the completion of the liquidation process
Business Restart Services
- For Business Owners and Directors looking to start up again, we offer a range of business restart services all priced to suit your new circumstances.
- Our business restart services are designed to fast track your new operation and help boost sales. These include:
- Multi-channel Digital Marketing Services guaranteed to generate traffic
- Websites and landing pages proven to convert traffic
- Automated customer communication systems
- Web hosting and online security options
- A full suite of back office services to include payroll, accountancy services and sales ledger management
Our insolvency services provide safeguards, experienced guidance and opportunity for Directors, all tailored to your specific requirements.
Find out how our consultations can save you time, money and worry.
This is the first step to resolving your situation
We know how demanding and challenging this is for Directors, however our consultations provide clear answers and solutions for both the company and you personally.
We’re friendly, but you’ll find we get straight to business
You’ll find our advisors friendly and keen to help, it’s how we do things. You’ll also find us very focused on the financial assessment of your business and providing the practical solutions you need.
No generalisations, it’s specific and tailored
This is why our consultations work so well, we discuss your specific problems and concerns and provide specific options and solutions, no generalisations, no spiel, no fluff.
The importance of a roadmap and personal survival strategy
We’ll provide a clearly defined route forward for you and the company along with a strategy to help minimise any potential personal liability you may face.
You get the chance to assess the value of what we do
Find out how we personalise our service, prioritise your personal interests, and provide the solutions that work. Assess it first-hand and decide if it’s for you.
Persistent cash flow problems need a resolution or they just get worse. Take action now and book your consultation (video call or phone call), you’ll be glad you did.