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Options for Company Directors in Difficulty

Options for company directors are in the complex. They were written by John A Waller, Director. Updated November 25th,2022.

Is your company struggling with cash flow and struggling to repay its debts? Read on and explore the options for

Company directors in difficulty.

What help is available if your business is facing financial difficulty.?

Where can I get help?

British businesses have struggled since the coronavirus pandemic outbreak. 

Therefore, it is essential to consider that business owners may not immediately benefit from trading when they return to normal. It is true that debts could potentially increase if cash flow isn’t coming in as quickly as it is being spent.

However, you can receive support and robust support. At HBG Advisory, our experienced team will help you resume the leadership of your business and ensure your business remains viable. 

So, carefully consider each option and, if in doubt, ask a member of our team at HBG Advisory. Qualified experts write our guides in turnaround and insolvency, including licensed insolvency practitioners. We are members of the Turnaround Management Association, Insolvency Practitioners and the Association of Certified Chartered Accountants. 

Assume control today and call a team member at HBG Advisory on the number found in the top right-hand corner of this web page.

Avoid insolvency by agreeing an informal deal with creditors.

 If my company can’t pay off its debts, can it avoid insolvency? And as a company director, what can I do?

Company Voluntary Arrangement CVA Explained

What is a company voluntary arrangement CVA? The process of a CVA explained? Can proposing a CVA reduce operational costs?

What is a Company Administration? How do I put a limited company in administration?

  • What does it suggest for appointing an administrator and its process? 
  • Who appoints an administrator? 
  • What is a pre-pack administration? 
  • Performing an administration followed by Company Voluntary Arrangement CVA?
  • Options for company directors in difficulty – Trading out of the financial position

A common-sense way to trade out of cash flow problems. Perhaps the first option for a business to consider when it experiences financial issues, such as

  • HMRC Tax and VAT arrears;
  • Significant cashflow difficulties; 
  • Creditor Pressure. 
  • HMRC Time to Pay VAT & PAYE 

Arranging a time to pay with HMRC.

The Business Payments Support Service helps businesses gain time to pay agreements with HMRC. 

Call 0330 056 3120 and ask for John Waller, who will business and company debt help and Bounce Back Loan Support.

Would you please ensure you prepare an accurate forecast, cash and realistic proposals to repay the tax over an achievable period? 

The team at HBG Advisory can assist you with the forecasts.

  • Receivership

Operating a limited company established over 20 years, currently experiencing trading difficulties and having issues with the established company bank, you should digest what’s written below and contact HBG Advisory.

Directors in this situation should take all steps to secure the position of their creditors. We suggest you implement the fundamental ways to improve your company’s position. Firstly:

Reduce operating cost;

  • Identify the main issues formulating a reversal plan;
  • Arrange a meeting of all directors, ensuring they remain advised of the company’s position;

If all fails, consider the option best suited to your limited company, as detailed below.

To clarify a misinterpreted term. The receivership of a limited company, often confused with administration, is the term insolvency used to secure creditors such as banks when security was taken into account. However the Enterprise Act of 2002 changed how monies after that date do not fall under receiverships, as administration now replaces.

  • Voluntary Liquidation

Voluntary liquidation can provide a quick way to close your limited company, removing creditor stress and any other business worries. Assuming the company is insolvent, a creditors voluntary liquidation may be considered.HBG Advisory can carry out voluntary liquidation without the risk of personal liability. Check out this process with a member of our team.

  • Compulsory Liquidation

Suppose a limited company ends up in compulsory liquidation. In that case, this is usually the result of an aggrieved unpaid creditor choosing the last resort to either leverage payment or shut the company down, allowing the courts to appoint the official receiver.

A compulsory liquidation by a creditor is action through issuing first a winding-up petition.

So how does a limited company undergo compulsory liquidation, and what happens in the liquidation process?

  • Company Voluntary Dissolution

A dissolution may be the best option if your limited company has only a few minor debts.

  • Refinance Your Company

Our guide to refinancing the company.

  • Issues which may price further problems

Management decisions actioned at this challenging time are vulnerable to legal complications. Say you reduce your workforce. The UK redundancy procedure requires strict adherence. Failing to do so will generate unfair dismissal claims, increasing pressure on the business.

Decisions to cancel orders require a review so that penalties are not activated.

Importantly check bank agreements to ensure you do not mistakenly initiate a breach by disposing of secured assets.

  • Trade Sales Guide

Many owners seek to sell their businesses when in financial distress. It is usually best practice to have a professional review of your business beforehand to ensure:

Is your business solvent?

If not, consult an Insolvency Practitioner.

If the business is viable, the review will bolster the selling process, providing prospective purchasers with assurances and:

  • Provides the reason for its sale;
  • It’s valued;

Again, contact a member of our team for help with company debt advice and support.

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