There are many options available to directors when considering ways to recover and save a company, the available options can vary depending on the current state the company is in. Options may include sourcing new funding, restructuring company affairs including assets and debts, and entering formal insolvency solutions from a licensed insolvency practitioner.
Once you recognise that a problem exists, you should seek assistance from a licensed insolvency practitioner such as us, who can assess your situation and provide you with options available.
How we work
Our objective is to achieve the outcome you desire as a director. To do this, we need to speak with you and analyse your company’s current position. Once you have made contact with us, our initial advisers will establish if there is a way in which we can assist you – if we can, we will then arrange for a free face to face consultation. We operate nationwide, meaning we can meet at the most convenient location for you.
The purpose of this consultation is to assess your situation in depth and provide free actionable advice, explaining in simple terms the options available to you and how you can move forward.
Recovery options can range from informal solutions such as sourcing funding, restructuring your business or putting in place a time to pay arrangement, to formal arrangements which require the involvement of a licensed insolvency practitioner. These options are legally binding and can be powerful solutions when they are required. Here are some of the options that can be considered.
Administration provides a company protection from its creditors whilst an insolvency practitioner (IP) takes control of the business and the directors’ powers cease. During this period creditors are not allowed to take further legal action, and the administrator must achieve one of three outcomes:
- Rescuing the company as a going concern, or
- Achieving a better result for the company than if it was liquidated, or
- Realising company property for the benefit of secured or preferential creditors
Administrative receivership is a rare procedure, instigated by creditors who hold floating charges against their debtors when terms of borrowing have been breached. An insolvency practitioner (IP) such as us are appointed to take control of the business and come to an arrangement to recover the debts owed. This is generally done through the sale of assets as a piecemeal process before handing the company back to directors, or through the sale of the whole business as a going concern.
Company Voluntary Arrangement (CVA)
A company voluntary arrangement is a structured repayment plan which includes all of a company’s unsecured debt. A CVA is a common procedure that companies use, allowing them to renegotiate existing debt but continue to trade through. Once in place, all interest and charges are stopped, and creditors cannot take further legal action against you with regards to any debts included in the arrangement. The arrangement will usually last a period of 5 years, and upon completion any outstanding unsecured debt is written-off.
Time to Pay Arrangements (TTP)
Time to pay arrangements are an informal solution, but can be ideal for companies who have a good track record with HMRC but have recently run into trouble with regards to payments owed to them. TTP arrangements allow companies to pay outstanding corporation tax, PAYE/NI or VAT liabilities in instalments over the course of either 6 or 12 months. However, HMRC must be confident that your company can make the full repayments before accepting a proposal.
Rescue not an option?
Sometimes the recovery of a company is not possible, and an insolvent solution such as liquidation may be the best or only option.
It is not always clear which options are the right ones for your individual circumstances, until you speak to professionals such as us.
There are many options available to help directors turnaround and recover their company, the selection of which will be based on appropriateness and the desires of the director. As we have outlined, there are both formal and informal solutions, and an effective recovery strategy may require more than one solution to run in conjunction.
The key to ensuring you recover and achieve the outcome you desire is to act fast and get advice.
How we can help
We are able to offer free actionable advice in real terms to company directors. The first step is to make contact with us. Once in touch we can talk through your current situation and go through how we can help you – we have many years’ experience in dealing with companies of all sizes, and there is nothing that we haven’t come across. All advice is free of charge and we are licensed by the ICAEW, so you can be assured the advice you receive is regulated in the interest of what is best for your company.