When should your business seek advice?

What are the options for limited company in distress?

• Saving your company
• Closing your company
• Possible outcomes
• Voluntary liquidation
• Pre-pack/phoenix
• CVA
• Tax Debt Rescue
• Asset protection
• Factoring
  

Introduction

The time businesses should seek advice is when one or more of the following occurs:-

• The business receives a County Court Summons - This usually means either the owners or managers are having difficulty running the business or cash flow becoming tight. 
• The business can't pay the staff's wages
• There is as an acute lack of working capital. This usually occurs when the sales ledger is less than the purchase ledger. The business will fail if its accounts don't balance.

At this point businesses should either speak with their accountants or contact one of the UK Insolvency Helpline's more specialist team of recovery advisors.

Money Advice Direct will assess the situation and identify the cause of the adverse situation. It may just be a matter of sorting out the management structure or collecting the businesses debts. If the problem is more serious, The UK Insolvency Helpline will instigate a full rescue package. Company's should therefore not ignore the warning signs.

Recent Example

Money Advice Direct was recently approached by a company involved in international haulage. The company had a full order book but found itself overwhelmed by debts. The helpline's recovery team put the company into a company voluntary arrangement (CVA). The strategy of saving the business was to carry out a sale and leaseback of the business premises. Once this has been done the creditors were paid in full. The business survived and is now trading at its most profitable levels. The UK Insolvency Helpline analysed a viable business and carried out the necessary troubleshooting to get the winning formula.

If the business has a small number of major creditors then an informal arrangement can be usually be negotiated. In our experience businesses tend to leave matters until the last possible moment and cannot face their banks or customers. Businesses should always try and communicate with their banks remember, the more information they have the more they can help.

In past cases we have seen company directors refusing to tell their bank managers because they think the bank will get nervous. Its usually comes as a surprise at how helpful the bank can be. Company Directors tend to forget that banks and major customers have as much to lose if the business involved is a valued customer.

Money Advice Direct always recommend meeting with banks to explain the situation. Bank managers do not like surprises.

Money Advice Direct works very closely with most of the major high street banks and often is asked to troubleshoot. This may often mean the closing down an unprofitable part of the business or deciding to drop a product or service from the companies line.

 

Get advice today on company insolvency problems