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
Silcox Coach Company
Kelly Burton • Automotive • Company Voluntary Arrangement (CVA)
Pembrokeshire-based Silcox Coach Company, which operates school transport as well as local bus services, has been placed into administration today.
Despite attempts by administrators from Sheffield-based Wilson Field to secure a buyer with various interested parties, the 134-year-old company, which operated a fleet of 65 coaches and buses from its base in Pembroke Dock, has now ceased trading.
Insolvency practitioners Kelly Burton and Joanne Wright from Wilson Field Limited were appointed by shareholders after the company experienced financial difficulties and as a result all 92 staff jobs have been made redundant.
However, in the region of 50 staff have been re-employed by Edwards Coaches of Pontypridd who have been granted the local authority contracts previously operated by Silcox.
Kelly Burton, director and insolvency practitioner at Wilson Field said:
“Silcox Coaches was a fourth generation bus and coach operator and over the years provided various forms of transport services latterly focussing local authority community bus routes, school services, coach hire and coaching holidays.
“The company had an excellent reputation within the industry, the local community and its clients. Initially there were a number of parties interested in buying the business and assets and we had hoped to save all the jobs of the loyal workforce. Sadly, despite our best efforts none of these came to fruition. On the positive side, Edwards Coaches of Pontypridd have re-employed approximately 50 of those staff.”
As well as office accommodation in Pembroke Dock, Silcox also occupied a small travel office in Tenby and a large bus and coach compound near the offices in Pembroke Dock.
Edwards Coaches is the largest family owned coach company in Wales employing over 500 staff and operating 260 vehicles. It currently operates National Express coaches from Haverfordwest departing daily to Cardiff, Heathrow, Gatwick London and various other destinations plus transportation for over 8000 students to school or college each day from bus depots all over South Wales.
It also operates coach holidays for 80,000 passengers a year across the UK and Europe and operates The Edwards’ Red Dragon coach which is the official carrier of the Wales Rugby Team.
Travellers who have booked and pre-paid for a holiday with Silcox may be entitled to a refund and should contact either Bonded Coach Holidays (BCH) e-mail: bch@cpt-uk.org or The Confederation of Passenger Holidays UK (CPT) Tel: 020 7240 3131.
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.”
Designer Recliners Limited
Kelly Burton • Manufacturing • Administration, Company Voluntary Arrangement (CVA)
A Sheffield furniture manufacturer and upholster has relaunched offering a smaller, more specialised range of products.
Anico Interiors Limited, which included reclining chairs for the elderly, had suffered cash flow problems and issues with profitability.
Designer Recliners Limited, managed by director Nick Wall, has purchased the assets and business of Anico saving all 11 jobs.
Andy Wood and Robert Dymond from Sheffield business turnaround experts Wilson Field were appointed joint liquidators on 8 June and advised on the sale of the 14-year-old company, based on Orgreave Crescent at Orgreave Industrial Estate, as a going concern.
Andy Wood, associate director and insolvency practitioner at Wilson Field said:
“Historically, the company offered a wide range of products but has now streamlined its offer to customers and cut out some unprofitable lines, as well as re-vamped its web site.
“Directors took advice from Wilson Field with the business sold to new company Designer Recliners Limited as a going concern, safeguarding all 11 employees’ jobs. The new company will offer the same service and standards under the same management team but focus on a smaller range of specialised products.”
The company employs skilled staff including upholsterers, seamstresses and cutters and was set up in 2002 by Nick Wall.
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