Can My Company be Rescued?
When you seek assistance from a licensed insolvency practitioner, their first objective will be to rescue your business and return it to profitability. This can be effected in a number of ways, depending on your company’s individual circumstances and the level of debt owed.
You may have heard the terms ‘business rescue’ and ‘business recovery’ - the processes associated with these terms include sourcing new funding, restructuring a company’s affairs including assets and debts, and entering formal insolvency solutions such as a Company Voluntary Arrangement or company administration.
Once you have recognised that a problem exists and that the company is in danger of entering insolvency, you should seek assistance from a licensed insolvency practitioner (IP). They will be able to assess your situation, and guide you towards the best options.
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You may have heard the terms ‘business rescue’ and ‘business recovery’ - the processes associated with these terms include sourcing new funding, restructuring a company’s affairs including assets and debts, and entering formal insolvency solutions such as a Company Voluntary Arrangement or company administration.
Once you have recognised that a problem exists and that the company is in danger of entering insolvency, you should seek assistance from a licensed insolvency practitioner (IP). They will be able to assess your situation, and guide you towards the best options.
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Closing a Company with Debts
As the director of a company which is failing due to unmanageable amounts of debt, you may be considering liquidation in order to start a new business, without the worry of outstanding debt, poor reputation and unhealthy relationships with creditors.
You may have tried to rescue your business by seeking alternative finance such as invoice factoring to meet immediate cash liabilities, sourcing investment to raise capital or applying for a bank loan/overdraft. Due to debt levels and low cash flow, this may be difficult to secure as your business poses a higher risk of non-payment.
In the event of liquidating a company with debts and establishing a new company, there are a few restrictions which should be taken into consideration. This is to prevent company directors starting a new company in order to escape debt and the consequences. A new company which emerges from the liquidation of an old company with the same assets and typically the same directors is known as a phoenix company.
You may have tried to rescue your business by seeking alternative finance such as invoice factoring to meet immediate cash liabilities, sourcing investment to raise capital or applying for a bank loan/overdraft. Due to debt levels and low cash flow, this may be difficult to secure as your business poses a higher risk of non-payment.
In the event of liquidating a company with debts and establishing a new company, there are a few restrictions which should be taken into consideration. This is to prevent company directors starting a new company in order to escape debt and the consequences. A new company which emerges from the liquidation of an old company with the same assets and typically the same directors is known as a phoenix company.
Director Liability for Company Debts
Can Directors Be Held Liable For Company Debts in a Limited Company?
When a limited company is insolvent, the business is bankrupt and therefore unable to repay debt due to a shortage of cash.
When setting up your business you have two main ways in which you can choose to operate; you can take on work as a sole trader, or alternatively you can incorporate as a private limited company. Both structures have their own pros and cons, however, the main benefit of operating as a limited company is that your business will be seen as its own separate legal entity, something which can be vital should the company run into financial difficulties further down the line.
When a limited company is insolvent, the business is bankrupt and therefore unable to repay debt due to a shortage of cash.
When setting up your business you have two main ways in which you can choose to operate; you can take on work as a sole trader, or alternatively you can incorporate as a private limited company. Both structures have their own pros and cons, however, the main benefit of operating as a limited company is that your business will be seen as its own separate legal entity, something which can be vital should the company run into financial difficulties further down the line.
Time to Pay Arrangements
As a response to the escalating coronavirus crisis the government has announced a raft of measures aimed at supporting businesses across the country as they deal with the ongoing Covid-19 outbreak and the knock-on effect to their business. As part of a support package announced during the March 2020 budget, it was confirmed that the existing HMRC Time to Pay scheme will be extended to give more companies a helping hand when it comes to managing their tax affairs. The Time to Pay arrangement gives companies additional breathing space during which to settle their existing HMRC liabilities, something which could be invaluable in the current climate while businesses adjust to the unexpected and rapidly changing circumstances.
Real Business Rescue
Head Office 340, Deansgate, Manchester, M3 4LY, United Kingdom
Real Business Rescue specialise in a wide variety of services including company debts, liquidation and closure, restructuring and rescue and specialist business advisory for a wide variety of industries and sectors throughout the UK. We cater for businesses and organisations that require assistance with their insolvency issues during COVID-19 and can offer expert advice across a broad range of professional services.