No business owner relishes the prospect of liquidating their company so we’re pleased to say that debt does not have to spell the end.
If your company is facing financial difficulties there are other options you can consider.
We have taken the liberty of outlining a few of them below to help you on your way.
Option one: Company voluntary arrangement
When a company proposes an arrangement to repay creditors over a fixed period, this is known as a company voluntary arrangement.
If creditors holding more than three quarters of the debt accept the proposal, then all creditors are bound by the agreement and cannot take action against the company.
The agreement is managed by an insolvency practitioner who reports on progress annually until it is complete.
Option two: Administration
The aim of administration is to save the business as a going concern by appointing an administrator to manage the company’s affairs.
The process protects a company from its creditors by preventing them from petitioning for its dissolution.
An administrator can be appointed in a number of ways including nomination by the company or the holder of a floating charge, or by an administration order from the court.
The only restriction is that the nominated administrator must be an insolvency practitioner.
Option three: Administrative receivership
Creditors are able to appoint an insolvency practitioner as an administrative receiver to recover money on their behalf.
This happens after the creditor is granted charge of company assets by the company in question.
The methods through which money can be retrieved include continuing business under supervision, selling all or part of the company or ceasing trading and selling off the assets.
Hopefully our guide has helped you to see that your debts do not have to mean the end.
But if you’d like to discuss your circumstances in more depth then we’d only be too happy to help.