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Advice for Large Businesses in Specialist Recovery

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Some companies make the mistake of failing to file a return because they haven't the money to pay the amount due. This is where HMRC will step in and 'estimate' an amount they assume you owe and they will then base a surcharge on that amount.
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When Can a Company Use Pre-Packaged Administration?

  • The business must be insolvent and have no viable prospect of recovery. In short, a business is considered to be legally insolvent when the amount it owes in current and contingent debts and liabilities exceeds the combined value of its assets, and/or when the business has defaulted on a debt of more than £750 and has failed to comply with a statutory payment demand as this is evidence that it cannot pay it's debts as they fall due.
  • The insolvency practitioner and company directors must be able to show that no other solutions would have been more beneficial to creditors. Company directors and insolvency practitioners are required by law to act in the best interests of the insolvent company's creditors. Therefore, a pre-pack administration cannot be used unless it results in the best outcome for creditors.
  • The purchaser must be able to pay fair market value for the assets out of their own personal funds. This is what makes a pre-pack ethical -  the proceeds from the sale of assets are distributed amongst creditors, so it is essentially the same is if an unrelated third-party purchased the assets during liquidation, except the third-party can be one or more directors of the insolvent company.  

The Main Benefits of a Pre-Pack Administration

  • Retaining the Assets of a Failing Business – Instead of going out of business and losing all clients, employees, contracts, equipment, inventory, property, and other assets, the company's directors can buy some or all of the assets and transfer them to a new company. This is a huge relief to most business owners and directors as they've worked hard to accumulate the value that the business has, and it is certainly a refreshing surprise to learn that it may be possible to save some of that from being lost.
  • Uninterrupted Business Operations – Because of the fact that the assets, work in progress and staff transfer over to a new limited company in one day without ceasing operation at all it is not uncommon for the pre packaged administration to provide uninterrupted service to its suppliers and general public.

 

Who we help

  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships

Contact our team

Jonathan Munnery
Andrew MacKenzie
Julie Palmer
Thomas Mckay
Keith Tully
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65
Number of UK Offices
30000
Directors Helped
70+
Licensed Insolvency Practitioners