IT company closure and rescue options
IT companies are part of one of fastest growing commercial sectors in the world, but that does not mean they are immune from financial challenges. With a need for constant development and employee training in an ever-adapting industry, along with energy and business rates, the operational costs of running an IT company remain high. For directors of IT companies which are faced with financial challenges, it’s essential to find insolvency advice and understand the rescue and closure options that an insolvency practitioner would be able to provide.
Our initial advisory team offer free, confidential, and impartial advice with a no obligation consultation. We will look at the right options to suit your company’s needs and will consider all of the specific financial issues your IT company could be facing., which may include, but not be limited to:
Common financial challenges for IT companies
We can help advise on specific financial issues your IT company may be facing, including but not limited to:
- Software licensing, intellectual property rights and asset management
We will help you manage and protect intellectual property rights, as we can assess the value of technology assets and software licensing agreements. We will help identify opportunities for realisation, ensuring a fair and correct valuation when it comes it to asset disposition and negotiations during an insolvency procedure. - Data protection and GDPR
During an insolvency procedure, all GDPR obligations must be ensured and kept to. We can help you navigate with compliance during insolvency proceedings. - Contracts and service agreements
We will always look to minimise disruption to contracts and ongoing client relations. Keeping clientele and on-going work is essential when undertaking company restructuring, or if securing invoice financing. - Employee management and redundancies
IT companies often fight for highly skilled workers; we understand the importance of keeping them on board and retaining key personnel. We can also ensure that staff understand their redundancy pay entitlements and how a Transfer of Undertakings Protection of Employment rights (TUPE) would work during company restructuring. - Bounce Back Loans (BBL)
The government backed Bounce Back Loans helped companies manage their finance during the COVID-19 pandemic. With the loan repayments now coming into fill force, we can advise on the options you have available for repaying a BBL and how it would be treated in liquidation.
How we can help rescue your IT company
Below are two formal insolvency procedures, which would allow your estate agents to continue trading whilst protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a legally binding payment plan between a company and its creditors. The process you enables you to restructure your company’s debt, by making one monthly affordable payment. Once the plan is agreed with by your creditors and you have entered the process, any legal action from those creditors will be dropped. The procedure typically lasts for up to five years, writing off any remaining unsecured debts upon completion.
More on Company Voluntary Arrangements - Restructure your company through administration
Administration is an insolvency procedure for insolvent companies. Entering the procedure, your IT company will initiate a temporary state of protection given by a moratorium that halts creditor action, including legal proceedings. This gives 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, or the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your IT company
If your IT company is insolvent and creditor pressure has reached a level where the business cannot continue trading, formal liquidation would draw a line under its operations and write off its unsecured debts.
- Close your IT company down via a Creditors Voluntary Liquidation (CVL)
A (CVL) will see the formal liquidation of your IT Company. The procedure is designed for companies that are insolvent and have unmanageable levels of debt. Your IT company would cease its trading operations, realising the company’s assets and removing the threat of legal action from creditors. If eligible, employees and directors can claim for redundancy and other statutory entitlements through the Redundancy Payment Services. Once completed any remaining unsecured debt tied to your company will be written off and the company dissolved.
More on Creditors Voluntary Liquidation - Close your IT company down and start again via a Pre-pack Liquidation
A Pre-pack liquidation is an informal term for a type of CVL where the sale of your company’s assets is arranged before liquidation. This process would allow your IT business’ operations to continue seamlessly through the purchasing company. The company name may be reused where appropriate, and employees can transfer under Transfer of Undertakings (Protection of Employment) 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.
More on Pre-pack Liquidation
Commercial finance for IT companies
If you believe that your IT company needs a bridge in finance to boost cash flow or improve your outgoing workflow. There are various forms of commercial finance which can give you provide relief and aid to your company. IT companies can often see late paying clients, which can slow down cash flow. Invoice finance, can act as a relief as it covers unpaid invoice, whilst outstanding payments are chased. Most commercial finance options are only available to companies that have a clear structure in repaying any borrowing. We can help advise you on what form of finance will be the best fit for your business and can help negotiate the best rates.
More on commercial financeHow to get in touch with us: The next steps
Our team of experienced initial advisors will be offer you comprehensive advice on the most suitable closure and recovery dependent on your IT company’s financial situation. If you’re concerned about your company, we will be able to help you understand the implications of the insolvency procedures available and our consultation will be tailored to help you achieve your desired outcome.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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