Pre Liquidation Solvency Planning
Professional Review Pre Liquidation –
Planning ahead of a potential liquidation – Insolvency planning & evaluation
Pressures from creditors, banks, and HMRC often force company directors into situations that seem insurmountable.
Directors must react quickly when they feel unable to manage their situation. However, they must consider the impact of liquidation.
Directors must consider pre-liquidation solvency planning or evaluation. By carrying this out, directors can comprehend and agree on the future of their company, if insolvent, and no longer viable.
So company directors must understand why such a meeting is required. You may be surprised at what a licensed practitioner can offer, and all may not be lost.
Apart from closing your company down, using a liquidation. HBG Advisory may prepare a company voluntary arrangement or company administration to allow the survival of a viable business.
For further assistance, please contact the team at HBG Advisory on 0800 612 5448.
Before considering taking any action to commence a Creditors Voluntary Liquidation of your company, a concise, competent review of your limited company’s financial affairs remains required before any decisions are approved.
Pre Liquidation Solvency Planning & Director support
In the UK. If you are a company director of a company registered in England and Wales, you must conduct yourself legally and morally when in office.
The office of being a Company Director is a minefield and often abused. However, those who accept a directorship. Must be required to act in the company’s best interests, shareholders, and importantly creditors when producing decisions that affect the company.
Company Directors have fundamental responsibilities and must be informed of all their options, while simultaneously having access to up-to-date and accurate information to plan long-term solvency.
However, company directors must understand their potential liabilities concerning business debt, and any potential penalties or disqualifications if your limited company faces financial distress or insolvency.
Currently, the UK government faces the current challenges of the present pandemic. In June 2020, the Corporate Insolvency and Governance Act (CIG Act) came into effect. The act designed to maintain businesses trading has had a significant impact on how insolvency operates in the UK.
With ever-changing rules and regulations, the UK economy and the rest of the world face incalculable events financially. So seek robust independent business advice from the team at HBG Advisory and consider essential directors liability review.
Pre Liquidation Solvency Planning – So what is next?
HBG Advisory provides a complete snapshot of your business at a date to establish its viability and solvency during pre-liquidation solvency planning.
We understand that approaching licensed insolvency practitioners concerns many individuals, as it is a worrying time.
However, all is not lost. Indeed, our primary objective is to secure the business while protecting the interest, especially of creditors.
So to understand your business and any issues, we need openness by both parties to deal with the facts. Only then can we put matters right.
- Firstly, ensure completion of our initial request pack;
- Then, examine the company’s accounts over the past five years, along with actual performance to protected budgets:
- Establish charges registered against the company and its assets;
- Review customers/clients of the company;
- What are the directors planned exit routes for the sale of the business or their retirement?
- Evaluate the strength of the market sector the company operates in;
- Strengths and weaknesses of company operation/management/workforce;
- Any succession plans.
Nevertheless, often our snapshot reveals an answer different to expected. The company is viable, and a Creditors Voluntary Liquidation (“CVL”) is unsuited for your limited company.
Pre liquidation solvency planning is necessary to achieve the best possible outcome for your business and creditors of the company.
Having a review gives directors assurance when considering creditors voluntary liquidation or not. If the view is a liquidation is the only option, the directors will have a clearer vision of matters about to unfold, and may derive comfort from the final decision, allowing them to trust the nominated liquidator.