When do I need an insolvency practitioner?
You should speak to a licensed and regulated insolvency practitioner (IP) if your company is experiencing financial difficulty, or if you’re concerned about its financial position and believe that it may soon become insolvent. Taking advice from an IP early can help protect your company from creditor pressure and allow you to work towards the best outcome.
Additionally, IPs can assist directors of solvent companies who are looking to liquidate.
Signs that you may need an IP’s advice
As a director, you must always be aware of your company’s solvent position and watch out for signs of deterioration. You should take advice from an insolvency practitioner as soon as you become concerned about your company’s financial position.
Common warning signs that your company is struggling and may become insolvent include, but are not limited to:
- Cash flow pressure
A lack of funds to support growth and daily operations, as well as other cash flow-related problems, are among the first signs that your company could soon be, or is already, insolvent. - Creditor pressure
Your company’s creditors are pressuring it to repay its debts. This could include sending repayment reminders, filing legal action, and even sending debt collectors or enforcement agents. - Falling profits
A decline in revenue and profits could indicate more imminent, pressing financial difficulties. - HMRC Arrears
You should take advice early if you have unpaid debts to HMRC and address them in a timely manner. - Inability to pay liabilities
If your company cannot repay its liabilities as and when they fall due, your company is insolvent. You can contact us for free, impartial, confidential advice.
Only licensed and regulated IPs can carry out formal insolvency procedures. Make sure you’re taking advice from a licensed and regulated IP and not a third party who may charge you before referring you to one.
Why taking advice early matters
By taking professional advice from a licensed IP once you’re aware of any possible financial issues, you’ll receive free, impartial, confidential, non-obligatory advice you can trust. This can help manage potential risks and give you a better understanding of your position while exploring your company’s options.
As licensed insolvency practitioners, we can:
- Review your company’s position
- Explain your options and the associated costs
- Help you understand your duties as a director
- Assist you with the implementation of the appropriate formal process where required
Ignoring potential early warning signs of financial issues in your company can lead to:
- Allegations of wrongful trading
- Challenges to transactions (for example, preferences or transactions at undervalue)
- Investigation into your conduct as a director during a subsequent liquidation
- Personal liability for the company’s debts in some circumstances
Do I need an insolvency practitioner to close my company through a solvent liquidation?
A company can enter a solvent Members Voluntary Liquidation (MVL) if, as the director, you no longer wish to run the company, and that company has sufficient assets to make the process worthwhile. An MVL can be useful if you’re looking to close your company in a structured and legally compliant way while extracting the company’s maximum value. As with an insolvent liquidation, this must be carried out by a licensed and regulated IP.
Even if your company is solvent, you may be anticipating financial issues. We can advise you on what actions you can take to minimise potential damage from a possible insolvency. Taking advice won’t discredit your company, harm your credit rating, or influence creditors.
More on a solvent Members Voluntary Liquidation (MVL)How our insolvency practitioners can help your company
As licensed insolvency practitioners, we can offer free confidential advice and can carry out the following formal insolvency procedures to help you and your company.
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a payment plan between a company and its creditors that allows you to restructure your company’s unsecured debts, while continuing to trade, by making affordable monthly payments over a fixed period. We start by assessing your company’s financial position, determining a realistic repayment amount. These terms are then proposed to your creditors and if approved, your company enters the repayment plan. When in place, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The process lasts for up to 5 years and on successful completion, any remaining unsecured debt in the arrangement is written off.
- Restructure your company through administration
Administration is an insolvency procedure for companies. Entering the procedure, your company will be in a temporary state of protection by a moratorium that halts creditor action, including legal proceedings, giving your company the breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner, more profitable organisation. If rescuing the company isn’t a viable option we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
- Close your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your company, ceasing its trading operations, realising any assets, and removing the threat of creditor legal action. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed, your company’s unsecured debt will be written off and the company is dissolved, allowing you, the director, to move on.
- Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The company name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
- Close and liquidate your solvent company via a Members Voluntary Liquidation (MVL)
An MVL is the liquidation and closure of a solvent company. The procedure will formally wind up and close your company, whilst extracting the company’s maximum value, through its various tax benefits. The company’s assets, including any premises, are realised, with the remaining funds distributed to shareholders once creditors are satisfied.
How do I know if an insolvency practitioner is licensed?
All insolvency procedures, including liquidation, CVA, and administration, can only be carried out by a licensed IP. All IPs must be licensed and regulated by a regulatory body, and must follow the regulations in the Insolvency Act and the Insolvency Rules.
You can check if an IP is licensed via the government website.
Wilson Field’s insolvency practitioners are licensed by the Institute of Chartered Accountants in England and Wales (ICAEW) and licensed to provide advice and undertake insolvency appointments.
View our licenses on the ICAEW’s websiteWhy speak to us?
We have years of experience, advising directors on company rescue, turnaround, and closure solutions across the UK since 2001.
We understand the stresses associated with financial pressure and that every company has different circumstances. By speaking to us, you’ll receive:
- A straightforward approach
- Clear, regulated advice from licensed professionals
- A transparent breakdown of your options
- Solutions tailored to your situation
- Confidential initial discussions with no obligation
How to get in touch with us: The next steps
- Speak with our initial advisers
Make contact with our team via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems. - Formally engage with Wilson Field
If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.
In summary
You’ll need to speak to a licensed insolvency practitioner (IP) if your company is experiencing financial pressure or you’re concerned that it could soon become insolvent. By speaking to an IP, you’ll receive advice from licensed and regulated professionals, allowing you to make informed decisions and keep as many options open as possible. You should also speak to an IP if you’re planning to liquidate a solvent company or you require advice in anticipation of potential financial issues.
Case Studies
Statestrong Limited
Kelly Burton • Manufacturing • Administration, Creditors Voluntary Liquidation (CVL)
Insolvency experts Wilson Field has helped turnaround the fortunes of a loss-making manufacturing company in Lancashire providing a new future for its 80 employees.
Businessman Russell Blaikie acquired the struggling 40-year-old Statestrong Limited, headquartered in Lytham St Annes, through a pre-pack sale and has been able to help the company immediately utilising his expertise in manufacturing and management.
Arrangements for the purchase of Statestrong’s business and assets were negotiated by Sheffield business specialists Wilson Field who affected the sale shortly after being appointed.
The company, which manufactures and supplies aerosol and liquid products for use in health and beauty, household, automotive and industry globally, posted sales of £12m last financial year, but had suffered pressure from creditors with outstanding arrears.
The total value of the deal is undisclosed but includes the business and the assets of the company based on Boundary Road in Lytham St Annes and Tarporley in Cheshire, which will now trade as Statestrong Products Limited.
Mr Blaikie said:
“Transactions of this nature are sensitive and require careful handling. The team at Wilson Field provided exactly the right professional approach.”
Wilson Field’s insolvency practitioners Kelly Burton and Joanne Wright worked closely with Mr Blaikie along with senior corporate case administrator Gareth Kinneavy.
Kelly Burton, said:
“The company had a wealth of expertise but was straddled with financial liabilities which ultimately made its future questionable. Looking forward, a previously distressed business now has a viable future.”
Berks Healthcare Services Limited
Kelly Burton • Healthcare • Administration
Wilson Field has advised on the sale of a Slough-nursing agency which was bought out of administration saving all 7 jobs.
Berks Healthcare Services Limited, which traded as Enchor Healthcare Services, specialised in providing healthcare professionals for the public and private sector.
It supplied registered general and mental health nursing staff, together with unqualified support and ancillary staff, to private hospitals and care homes in the areas local to the company’s offices in Slough, Portsmouth, Birmingham and Luton.
The company, headed up by healthcare professionals, called in administrators from Wilson Field after suffering from a fall in turnover, which left it struggling to meet unsustainable historic legacy debt. It had also been issued a winding-up petition from HMRC.
Kelly Burton and Emma Bower were appointed as joint administrators on 14 June 2018 and concluded the sale of the business and assets for an undisclosed sum to an unconnected company Connect Care & Support Limited, also based in Slough.
Kelly Burton, director and licensed insolvency practitioner at Wilson Field said: “The company had a turnover in the region of £2.9m per annum in 2017. However this is a very competitive marketplace, which is primarily price driven and recent minimum wage legislation changes had also impacted on the company’s potential profit margins.
“As administrators, we sought a purchaser for the business.
“This pre-packaged sale to Connect Care & Support Ltd saved seven permanent jobs as well as numerous temporary agency staff.
“It has also mitigated employee termination claims in the nature of wage arrears, accrued holiday pay, redundancy and pay in lieu of notice estimated to total £29,576 as the liabilities have transferred to the successor business under the TUPE regulations.
“This means the business has a new future moving forward.”
Berks Healthcare Services Ltd was incorporated in January 2015, but can be traced back to February 2007. Enchor Health Care was recognised and registered as Recruitment Consultants providing both permanent & temporary staffing solutions to many different Health and Social Care settings. It also had supported living and rehabilitation centres.
Oldham Precision
Kelly Burton • Construction & Engineering • Administration
Machining engineers Oldham Precision has been bought out of administration saving all 12 jobs.
The company’s principal activity was the sub-contracting manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.
Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.
Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.
After advice from Wilson Field, the business was sold to the existing management team as a going concern saving all 12 employees’ jobs.
Kelly Burton, director in the Leeds office at Wilson Field said;
“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 employees’ jobs and offering a better return for the company’s creditors than alternative options.
“The new company will be under the same management offering the same standards of service to its customers.”
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