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
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 years ago 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.
K2 Technologies Ltd and K2 Thermal Imaging Ltd
Kelly Burton • Service Agency • Administration
Wilson Field has helped secure the sale of two related North East businesses, which developed and manufactured thermal imaging equipment, as a going concern to Cenergem Limited backed by a group of local investors not associated with the current management.
Kelly Burton and Joanne Wright from Sheffield-based insolvency specialists Wilson Field were appointed joint administrators of Darlington-based K2 Technologies Ltd and K2 Thermal Imaging Ltd on 25 July 2016.
The two companies had experienced cash flow problems following to a sharp decline in the demand for their products due to increased global competition in the market over the last 18 months.
The sale, which resulted in six of the current eight jobs being saved, was achieved by Wilson Field, working alongside valuers and asset management consultants Charterfields, who handled a number of inquiries and Mark Wilkinson, insolvency partner at Shulmans Solicitors in Leeds.
Kelly Burton, director and licensed insolvency practitioner at Wilson Field said:
“During the past 12 to 18 months K2 had begun to experience increased competition in the market. Competitors had started to manufacture and sell similar products at a lower price, meaning the company had seen a sharp decline in the demand of products and a resultant shortage of cash flow.
“Our job was to realise a sale of K2 as a going concern to achieve the best return for the company’s creditors. There was significant interest by a number of parties. The resultant sale has also saved six of the eight jobs.”
K2 Thermal Imaging Ltd and its predecessors were involved in the development of three products establishing the company as a lead pioneer in thermal imaging.
The company designed and engineered three main product ranges for extensive use in the marine, firefighting and industrial sectors, allowing operators to enter smoke-filled environments to detect and rescue people with a hands-free application, therefore improving success rates in recovery.
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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