Working Men’s Clubs Closure and Rescue Options
Working men’s clubs can often face operational challenges and financial difficulties. In a sector that usually contends with unpredictable customer demand, rising operational costs, compliance issues and increasing competition from alternative venues, it’s not uncommon for working men’s clubs to struggle in today’s society. Whatever financial issues your business is contending with, understating the options available is crucial.
This guide provides tailored advice to help you manage the financial challenges working men’s clubs often face, offering the insights needed to make an informed decision on what’s best for your club.
The solvency test
As company director, you should always be aware of your company’s solvent position, as this will determine which solutions are best suited to your company. There are three tests you can run to see if your company is solvent or insolvent:
- Cash Flow Test
A company should be able to pay its bills and liabilities as they fall due. If not, it may be insolvent. - Balance Sheet Test
If your company’s liabilities exceed the value of its assets, your company could be insolvent. The amount you owe to creditors should not be more than the value of your company’s assets, including any money it currently has in the bank. - Legal Action Test
If your company has debt reminders or legal action from creditors, such as County Court Judgements (CCJ), a statutory demand or a winding-up petition for debts it can’t repay. The company may be insolvent.
Solvent advice for working men’s clubs
Many working men’s clubs own their trading premises, which often hold significant value. For clubs that are struggling financially and are seemingly in a position of insolvency, the value of owning their premises means the club could be solvent and therefore enter into a solvent liquidation
- Close and liquidate your solvent working men’s clubs via a Members Voluntary Liquidation (MVL)
An MVL is the liquidation and closure of a solvent company. The procedure would formally wind up and close your club, whilst extracting the company’s maximum value, through its various tax benefits. The clubs assets, including the premises, are realised, with the remaining funds distributed to shareholders once creditors are satisfied.
More on Members Voluntary Liquidation
Common financial challenges for working men’s clubs
We can help advise on specific financial issues your working men’s club may be facing, including but not limited to:
- Declining revenue
The rise of alternative social venues like cafes, restaurants, and pubs, as well as competition from supermarkets offering cheap alcohol, can massively reduce footfall for working men’s clubs. Struggling to cope with potential drops in cash flow can quickly lead to financial issues, we offer advice on the best means of helping you deal with the solvent position of your company. - Financial management
High food prices, energy costs and wages and changes in alcohol duty or VAT can increase the cost of products or reduce margins, especially if these costs cannot be passed on to customers. With costs building, we can help you assess your company’s solvent position and advise on the best procedures moving forward. - Strict regulations and compliance
Working men’s clubs must comply with various regulations, including health and safety, alcohol licensing, and employment laws. Non-compliance can lead to fines or even closure. We can help you navigate these legal and compliance issues through insolvency proceedings. - Unaffordable Bounce Back Loan (BBL)
The government-backed Bounce Back Loan Scheme was a lifeline for businesses during the COVID-19 pandemic. However, many companies are now facing challenges in repaying these loans. We can guide you through your repayment options and explain how a BBL is treated in different insolvency scenarios.
How we can help rescue your working men’s clubs
Below are two formal insolvency procedures, which would allow a working men’s club to continue trading whilst being protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a formal repayment plan designed to help companies manage their unsecured debts, by making affordable monthly payments to their creditors. The process can last for up to five years and, once concluded, the remaining unsecured debts will be written off. By entering a workings men’s club into a CVA, the company will be protected by creditor action and allow directors to remain in control, continuing to trade and preserving their brand’s reputation, whilst maintaining crucial supplier relationships with continued payments.
More on Company Voluntary Arrangements - Restructure your company through administration
By entering your company into Administration, it will be in a state of protection from creditors, halting debt enforcement action, allowing your workings men’s club to continue its operations. A licensed insolvency practitioner will act as administrator and try to rescue the business as a going concern, by turning the company into a leaner more profitable operation, with the potential of restructuring the company by reducing staff costs, renegotiating payment terms or finding new investors. The administrator will also explore potential sale options as a means of exiting the procedure, preserving the brand, jobs, customer relationships and maximising a return for creditors.
More on administration
How we can help close and liquidate your working men’s club
The liquidation of your workings men’s club would draw a line under its operations, dissolving the company and clearing its unsecured debts.
- Close your working men’s down club via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure designed for insolvent companies. The process would see a working men’s club cease its trading operations and close down in an orderly and legally compliant manner. An insolvency practitioner will assess and realise the company’s assets to raise funds to pay creditors, while terminating outgoing payment agreements, such as loans and leases and once completed, will write off the company’s unsecured debts and arrears. If eligible, employees and directors can apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
More on Creditors Voluntary Liquidation - Close your working men’s club down and start again via a Pre-pack Liquidation
A pre-pack liquidation is an informal term for a type of liquidation where one company agrees to the pre-purchases of the assets of an existing company, which is then liquidated. This procedure would enable you to continue the trading of your workings men’s club, in a new limited company, without any historical unsecured debt, causing minimal disruption to the business’s brand, customer base and operational activity. The new limited company can also retain key assets such as leases, equipment and transfer employees under TUPE regulations. In some cases you may reuse your company’s trading name, but this can be complex. We can advise you on these processes and how it works.
More on Pre-pack Liquidation
Commercial finance for working men’s clubs
If your company has an otherwise healthy cash flow, but a large, upcoming payment risks pushing you into a negative position, commercial finance could be a viable solution. There is a range of finance options that can potentially help cover a one-off expense or a gap in the company’s incoming payments. Speak to us for a more detailed breakdown of which commercial finance options best fits your company.
More on commercial financeHow to get in touch with us: The next steps
If your working men’s club is facing financial difficulty, it’s important to understand the different closure and recovery options available. Our initial advisers will offer a comprehensive explanation of the different options available to you and our experienced consultants will look at tailoring our processes to your company’s circumstances.
- Speak with our initial advisers
Contact our team via phone, filling out our 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 on the available solutions and which we feel 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 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.
💬 Live Chat - Available
✅ Free confidential help & advice
If you or your company is in financial difficulty, I may be able to help you. Our phone lines operate 9am until 9pm - 7 days a week.
Chat With MeFor immediate help & free advice, please freephone:
Free Consultation
Request a free confidential telephone consultation from 9am - 8pm, 7 days a week.
