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 Payments 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 licences 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
National Videogame Arcade
Kelly Burton • Leisure & Hospitality • Administration
Image from GameCity.org [http://gamecity.org/]
Over its time, it has also been involved in working in collaboration with Arts Council England, Times Educational Supplement, Wellcome Trust and the British Library to name a few. These projects and collaborations focused on developing the role of videogames in culture and education.
Home of the acclaimed GameCity festival, The National Videogame Arcade in Nottingham, sadly fell into cash flow difficulties earlier this year despite an increase in its footfall. An eleventh hour investment by a director-led consortium, led by director Iain Simons, saved all 40 jobs at the increasingly popular tourist attraction and museum.
The cash flow difficulties led to the destination being taken into administration, Wilson Field’s Andy Wood and Lisa Hogg were appointed as joint administrators on 19th August 2016.
Andy Wood, an insolvency practitioner at business turnaround and insolvency specialist, Wilson Field, said:
“The investment story behind the consortium is based on the passion that Iain Simons and his staff have for the GameCity project.
“We were appointed as administrators after the company fell into financial difficulties, despite growing in popularity. The consortium of investors could clearly see the potential to turn the business around and with support from the staff, GameCity has a new future.”
Director of GameCity and investment consortium leader, Iain Simons, was very happy with securing the last minute investment and the service he received from ourselves: “The NVA is like no other facility within the UK and is rapidly growing in popularity. It was devastating to us when we realised that the business was in financial difficulty, but we knew it could be overcome.
“I have to give all credit to the staff here who volunteered to work without pay when we announced that the business was in trouble and this undoubtedly allowed us the time to pull together a consortium of investors to give the facility a bright new future and secure those jobs.
“GameCity is rapidly picking up pace and the Toast Bar, National Videogame Arcade and our collaborations with new partners in the UK and beyond are proving to be just as popular as we’d hoped.”
For more information on GameCity visit http://gamecity.org and for further information about our insolvency procedures, call us on 0800 901 2475.
Print On Solutions Limited
Kelly Burton • Service Agency • Administration
A Leeds print company has been bought out of administration, saving all 54 jobs.
Print On Solutions Limited was set up in 1999 and went from start-up business to the largest envelope overprinter in the UK with offices in Leeds and Bury, 12 litho presses and six digital presses.
Administrators Kelly Burton and Joanne Wright from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 11 April after the company, based in Century House, Holbeck, ran into financial difficulties following an ongoing dispute relating to a significant contract.
The directors took early advice and the business was sold to new company WEPOS Limited as a going concern saving all 54 employees’ jobs.
Kelly Burton from Wilson Field said:
“Following discussions with the directors, the business was sold to WEPOS Limited as a going concern, safeguarding all 54 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team.”
In 2003 Print On expanded by moving to a 12,000 sq ft, purpose-built factory in Leeds, designed to offer the business a state-of-the-art platform for growth.
The expansion of the group was through strategic acquisitions and mergers of envelope manufacturers. Tower Envelopes in Bury merged with Print On in 2010 and became the Lancashire division.
JS Security
Kelly Burton • Other • Administration
All 42 jobs have been saved at a Cheltenham security firm after it was bought out of administration.
Joint administrators Kelly Burton and Lisa Hogg of insolvency and business turnaround specialist Wilson Field were appointed to JS Security on 10 February after HMRC threatened to wind up the company because of accumulated tax arrears.
The company, which operated from Old Station Drive in Cheltenham, has now been bought out of administration by an existing associated company, JS Facilities Group Limited of Cheltenham, saving all 42 jobs.
The business will be operated by the existing management team led by managing director John Search. The total value of the deal is undisclosed but it includes the business and the assets of the Cheltenham-based company.
Kelly Burton, director and insolvency practitioner at Wilson Field, which has bases in Leeds and Sheffield, said:
“Unfortunately, the security services sector is very competitive which leads to hourly rate discounting and small margins.
“JS Security accumulated tax arrears which threatened its existence. After discussing the situation with the director, I am pleased that we have found a solution which will see the business continue to trade and also all 42 employees’ jobs transferred to the new company.”
JS Security was appointed the official security provider at Gloucester Rugby in June 2013 for two years and also won the contract to provide matchday security for the four Rugby World Cup matches at Kingsholm Stadium in September 2015.
The contracts covered match day security, including the hospitality areas, car park security and any additional security requirements.
JS Facilities Group Limited has been running for 15 years and operates throughout Gloucestershire specialising in security services for sectors including commercial, logistics security, construction, events, key holding and alarm response.
Services include remote video monitoring, control room services, lone working monitoring, security guarding, door supervisors, mobile security patrols, event security and first aid training.
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