Updated: 10th November 2020
If you’re a director and your company is facing financial difficulty, there are numerous ways in which we can help. At Real Business Rescue, we have built our reputation through years of experience and now stand as the UK’s largest, independent business rescue firm with one sole objective of assisting company directors in times of trouble.
What is paramount for directors to understand is that a) we’ve seen thousands upon thousands of different situations involving company hardship and b) you are not alone. In fact, there are over a million UK companies struggling to pay their taxes each and every year.
Many of the directors we help often say to us that our assistance or intervention has lifted a huge weight from their shoulders. Some business owners want to rescue their company and believe it has the potential to thrive once again. Others feel their company has had its day and need assistance with exit strategies. No matter what situation you are currently facing, we can offer expert, impartial advice. Either way we want to understand the background to your problems and help initiate a proper solution.
Here at Real Business Rescue, we not only provide comprehensive advice and support on all matters related to business restructuring and dissolution, we also offer several services designed to assist UK limited companies going forward. Our key services include:
A pre-packaged administration, often referred to as a ‘pre-pack’, is a popular solution whereby an insolvent company’s assets are sold to a third party in a pre-arranged sale. This third party can often be the company’s own directors in a ‘newco’.
A pre-pack is particularly attractive as rather than a company going out of business and losing all clients, employees, contracts, equipment, inventory, property, and other assets, the 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.
Another common solution is a company voluntary arrangement, also known as a CVA. If your limited company is insolvent, it can use a CVA to pay creditors over a fixed period. If creditors agree, your limited company can continue trading. The terms of a CVA are likely to provide lower monthly outgoings and would produce a binding contract for all creditors, which would prevent them from chasing and hassling you as long as the repayments are being met. A Company Voluntary Arrangement can be proposed for an insolvent firm at any time up until a winding up order is petitioned against your company.
Company liquidations are, along with pre-packs and CVAs, the most common business rescue services. There are two ways a company can go into liquidation – voluntarily, in a members or creditors voluntary liquidation, or involuntarily, in a compulsory liquidation. Voluntary liquidation is where a company is in too much in debt to recover via recovery solutions such as administration, financing, or a company voluntary arrangement (CVA) and the time has come to accept that liquidation is the only course of action. During the liquidation process the assets of the insolvent business are sold and the proceeds are used to repay as many creditors as possible.
Real Business Rescue can assist your company if it is struggling to pay tax, VAT or PAYE bills to HMRC who are often the main creditor in times of business strife. Companies can fall behind with their HMRC requirements such as corporation tax and VAT and if this is the case, HMRC often waste little time in taking action. For many insolvent limited companies, HMRC is a regular petitioner to wind up limited companies through the court so you must act quickly and take stock of the numerous options available to you before it is too late.
Did you know it is unlawful for your company to trade whilst insolvent? If you aren’t sure whether your company is insolvent or not, Section 123 of the Insolvency Act 1986 summarises the legal definition by essentially stating that ‘a company is deemed insolvent when one of its creditors (whom it owes a debt of more than £750) has served a written payment demand at the company's registered office and the business has failed to comply with the creditor's request within three weeks of being served the payment demand.’ If you’re a company director in this situation, you need insolvency advice and you need it fast.
A winding up petition is effectively the most drastic step your creditors can take against your company and represents a huge threat to the existence of your business. The petition is usually initiated due to creditors becoming tired of waiting for payment and reacting by declaring your company is insolvent and should not be trading. It can cost them around £2,000 to create so it is a hugely serious step to take and shows they mean business. If a creditor moves to wind your company up, you need to contact us as soon as possible.
Company administration is a formal procedure in which an insolvency practitioner is appointed to act as the administrator of an insolvent company with the goal of bringing about a recovery. If your company is being threatened by creditors (i.e. - a landlord, HMRC, your bank, credit card companies, etc.) and you fear that you could be taken to Court and put out of business, then continue reading to find out how an administration order could protect your company from liquidation and dissolution.