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Rescue and Recovery for Limited Companies

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If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448.

Rescue And Recovery for Limited Companies?

HBG understands that a company can find itself in financial difficulty. We provide robust rescue and recovery for limited companies throughout the UK, using business rescue and insolvency services. When we meet you for the first time, we give time to listen to your concerns (first meeting with a licensed Insolvency Practitioner), why you are where you are on, and plan either maintenance, turnaround or closure of the business. Our initial CONFIDENTIAL meeting remains free of charge and no commitment. 

It could be however, that the problem is less severe than initially anticipated, and can therefore be solved by raising funds, receiving special grants or switching to a credit facility. The earlier you talk to us, the greater the variety of solutions available. At the first meeting, HBG Advisory shall:

  • Explain solutions possible;
  • Providing clear and constructive recommendations;
  • Ensure all options remain considered before agreeing on a course of action. 

However, when seeking to go ahead, directors must ensure their directors’ loan counts are up to date and accurate. Many directors have overdrawn directors’ loan account, which causes directors to issue.

Rescue and Recovery for Limited Companies? Speak to an IP.

Company directors should speak with an IP when requiring company rescue and recovery for limited companies. Securing help on company debt advice & support. Ensuring they stay clear of:

  • Trading Insolvently; 
  • Allegations of wrongful trading, and 
  • Possibly personally liable for company debts.

Any appointed insolvency practitioners (IP) have several tools and processes. The purpose of insolvency is to maximise the realisation of a company’s assets while insolvent, so that the liquidator can distribute the realised money to creditors of the company.

If you’re worried you won’t afford the IP, then relax. Many liquidations remain paid from the realisation of the company’s assets. Additionally, company directors may qualify for redundancy terms.

Warning signs of a business facing Insolvency?

  • Shrinking profit margins;
  • Threats from Bailiffs;
  • HMRC debt build-up;
  • Consistently deferring payment to crucial suppliers;
  • A registered CCJ on your limited company;
  • Business accounting in arrears;
  • Key Staff leave over insecurity;
  • Increase in threatening letters from Creditors;
  • Company bankers are bouncing payments.

Free Company Insolvency Debt Advice from Debt Charities.

In 1991, The Money Advice Trust set up Business Debtline, and further setting up:

  • The National Debtline and the Wiseradviser training program.

The Business Debtline helps businesses throughout the UK, focusing on debt advice for small businesses.

We summarize below, various rescue and recovery insolvency solutions for limited companies available.

  • Can a limited company go bankrupt?

No!

Bankruptcy in the UK applies only to individuals.

A creditor must be owed £5,000 or more before commencing a bankruptcy petition (referred to as a creditor’s petition) through the Court by an individual.

Then, if the debt is not paid, the Court may issue a bankruptcy order against the individual. Consequently, a ‘Trustee’ is appointed to commence realising the now bankrupts property, so that the proceeds can be then distributed to the individual’s creditors. However, the bankrupt individual will be discharged from bankruptcy, usually after twelve months of the date the order was issued, and their liabilities eliminated.

Those in Bankruptcy are therefore required to cooperate with their Trustees as per Section 333 of the Insolvency Act 1986, failing which the automatic discharge from bankruptcy restrictions may be suspended.

  • Company Administration.

When considering to put your company into administration appointing an administrator allows therefore  the company to continue trading. The courts however, can appoint administrators, along with creditors and directors themselves.

However, administrators can legally trade with the company while arranging a future sale, maximising the sale of the company and thus raising more money to pay to creditors of the company. 

An administrative order then guarantees immediate protection to the company, and all actions by creditors of the company now in administration stopped. Therefore, allowing the company directors time to prepare a rescue plan. For further reading on the commencement of administration, please read:

  • Pre-Packaged Administration.

A Pre-Pack Administration (“Pre-Pack”) when a company enters administration. It’s business and assets are then immediately sold following a sale agreement, determined before an administrator’s appointment.

The liabilities however, remain then with the company. Only the assets of the company remain sold, therefore appearing in a desirable ‘package’ for sale.

  • Creditors Voluntary Liquidation.

A Creditor’s Voluntary Liquidation or CVL remains however launched by the company’s directors, having advised and received approval to close the company due to its insolvency, and therefore no longer viable.

By this point, the directors would have established the company’s insolvency knowing it can no longer pay the company’s creditors, as and when they fall due, or by the fact that its liabilities significantly exceed its assets or both.

A Liquidator is then appointed and responsible for collecting the company’s assets and consequently distributing them to its creditors.

  • Members Voluntary Liquidation.

Members Voluntary Liquidation MVL remains initiated by directors. Decided by shareholders to put a company into liquidation.

The liquidator realises the company’s assets, creditors paid, and the balance repaid to its shareholders once all other company debts were paid. The funds received will therefore bring significant tax savings to the shareholders of the companies.

  • Company Voluntary Arrangement

A Company Voluntary Arrangement (CVA) is an alternative to winding up a limited company, which allows therefore for it to emerge from its financial difficulties over a period while paying its creditors at an agreed level.

A CVA allows a director to retain control of the company and continue to trade without historical debt encumbrance, which can significantly impact cash flow. In these circumstances, creditors usually accept a percentage payment of their debt over five years.

  • Rescue and Recovery for Limited Companies? – Company Turnaround (Non-Insolvency Usually).

Our professional, experienced restructuring team supports directors that rekindle life back into either underperforming companies or those impacted by the Coronavirus COVID19 Pandemic.

Our approach is simple! You put your heart back into your business, and we will then guide you on how to pump it.

It is important that company directors understand what does business recovery mean?

Strengths and weaknesses are essential to identify and then improve on the strengths and focus on curing the deficiencies, simple to say, but require years of experience to implement.

Remember. Every successful entrepreneur has a successful advisory team to support them to build and, importantly, maintain their business.

HBG Advisory works with you to map out your business future, while highlighting areas that require improvement along with your existing management.

All plans devised are achievable. To design targets that are difficult to achieve adds anxiety and failure.

The cost to achieve success is therefore not a cost. The price not to attempt is however a failure.

Rest assured, with the team at HBG Advisory, you are therefore in safe, qualified hands.

Learn more: Business Turnaround and Rescue Uk.

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Business recovery for distressed directors and limited companies.
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