Corporate Insolvency
Ensuring the most appropriate way forward is chosen to maximise returns and minimise loss to creditors when a company is insolvent is paramount. Acting swiftly helps shield creditors from further losses as well as protecting the personal position of directors and shareholders. Dealing with an insolvent company comes with its own additional suite of responsibilities and obligations underscoring the need for the support and guidance of a reliable, trusted advisor.
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Company HMRC Arrears
Her Majesty’s Revenue & Customs − better known as HMRC is the most common business creditor and for many company directors, it can be a daunting prospect dealing with them.
What Happens to Employees?
What happens to employees during liquidation and other insolvency processes?
When a company is insolvent, there are a number of formal procedures it can go through to help resolve the problems it is currently facing. Some of these procedures result in the closure of the company, others lead to the restructuring and streamlining of operations in order to allow the company a chance to recover and continue trading. The most commonly utilised processes are liquidation, administration, and the implementation of a Company Voluntary Arrangement (CVA).
In any formal insolvency procedure it is important to consider the rights of the insolvent company’s employees. This is especially true during liquidation, where the company is being wound up and existing employees being made redundant.
When a company is insolvent, there are a number of formal procedures it can go through to help resolve the problems it is currently facing. Some of these procedures result in the closure of the company, others lead to the restructuring and streamlining of operations in order to allow the company a chance to recover and continue trading. The most commonly utilised processes are liquidation, administration, and the implementation of a Company Voluntary Arrangement (CVA).
In any formal insolvency procedure it is important to consider the rights of the insolvent company’s employees. This is especially true during liquidation, where the company is being wound up and existing employees being made redundant.
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.
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.