An insolvency process is a serious step to take, and a stressful thing to contemplate. But if you take advice early, your range of options will be much greater, as will the chances of rescuing your business.
Insolvency procedures fall into two broad categories. They are either designed to protect the business and allow it to continue in some form or they deal with closing the company.
Rescue Procedure
If you think your business could be viable given time and breathing space, then one of the following rescue procedures could be an option.
Statutory Moratorium: a legal procedure which provides a period of breathing space for a company, during which creditors (including secured creditors) cannot take enforcement action
Administration: a court based procedure which prevents creditors from taking enforcement action (such as a winding up petition) against a company
Company Voluntary Arrangement (CVA): a legally binding agreement with creditors to reschedule and / or reduce a company’s debts to allow it to carry on trading
Closure Precedures
If continuing to trade isn’t a realistic option, it is still in the directors’ interests to make arrangements for an orderly closure of the company so they don’t put themselves at risk of personal liability.
Creditors’ Voluntary Liquidation (CVL): a legal procedure for closing an insolvent company where there is no prospect of preserving all or part of the business
Compulsory Liquidation: a court based procedure for closing a company and distributing its assets imposed on a company be the actions of a creditor
How we can help?
We’ll take the time to understand your situation, assess whether insolvency is the right option for you or whether it can be avoided altogether.
If an insolvency process seems to be the best option we’ll walk you through each of the processes in detail, so you have the information you need to make the right choice.
Whether you wish to continue to trade or close your company, taking early advice is always the best option. Contact us now on a no-obligation basis to see how we can help.
