Published: 20th December 2018
Ensuring the most appropriate way forward is chosen to maximise returns and minimise loss to creditors when a company is insolvent is paramount. Acting swiftly helps shield creditors from further losses as well as protecting the personal position of directors and shareholders. Dealing with an insolvent company comes with its own additional suite of responsibilities and obligations underscoring the need for the support and guidance of a reliable, trusted advisor.
At what can be a challenging time, adhering to the legal duties expected of a limited company director is a crucial component in minimising the potential for personal repercussions further down the line. It is vital you understand what acts constitutes misfeasance, and steer clear of making preference payments or disposing of assets at undervalue at any point during the company’s insolvency.
RBR Advisory’s nationwide network of licensed insolvency practitioners can advise directors of insolvent companies across the whole range of formal insolvency procedures in both terminal and remedial cases.
Should liabilities have reached a level which is no longer sustainable based on current profitability, a structured Company Voluntary Arrangement (CVA) grants otherwise viable businesses the ability to use future profits to support current levels of borrowing. Alternatively company administration may be considered to allow profitable areas of a distressed business to continue without the encumbrance of outstanding creditor agreements.
When all other possibilities have been considered and dismissed as unachievable or undesirable, liquidation may be the only remaining option. Creditors’ Voluntary Liquidation (CVL) formally brings to a close the activities of an insolvent or contingently insolvent company and can only be initiated by a licensed insolvency practitioner.
A partner-led service, we handle the liquidation process from start to finish and our full-service offering includes support from an FCA-regulated firm who provide additional advice on director redundancy and statutory entitlements for your employees to ensure they are being fully advised throughout. We will assume ongoing responsibility for dealing with creditors including HMRC, the valuing and disposing of company assets, and ensuring the company is brought to a close in full compliance of the Insolvency Act 1986.