Close My Recruitment Company

Rescue, Recovery, and Closure Options for Recruitment Companies

As the cost of running a business continues to rise in an ever-uncertain economic climate, this overwhelming sense of uncertainty on behalf of companies is leading to many shelving possible plans of expanding their workforce. In such an uncertain landscape, planning for the future is an almost impossible task, with many companies instead favouring the option of securing their business and protecting its existing workforce until the economy returns to a better position. 

Employees may also be affected by the uncertainty, preferring to remain with the stable employment position they already enjoy, rather than taking a risk with the economy is such a state of flux.

This prevailing uncertainty is having knock on effects for other industries - such as recruitment - which rely on the fluid movement of employees from one role to another. A lack of economic confidence makes a recruiters job much more difficult as they struggle to entice workers away from their current positions.

Close your Recruitment Company via Liquidation

If you run a recruitment firm and are concerned about falling demand, are unsure how long you can continue trading, you may be considering placing your company into liquidation. If your recruitment company is insolvent – or you believe it is on its way to becoming insolvent – you can initiate the liquidation process through a formal insolvency process called a Creditors’ Voluntary Liquidation (CVL).

Liquidation of your recruitment company is a serious step to take and it is only usually considered when the company is struggling with unmanageable debts and the chance of its fortunes turning around are slim. A CVL can only be conducted by a licensed insolvency practitioner who will act as the company’s liquidator throughout the process.

Taking advice from an insolvency practitioner should be a priority if your recruitment agency is experiencing financial distress. An insolvency practitioner will be able to talk you through your options – including liquidation – and will be able to advise you on which solution is the most appropriate for your circumstances.

When a company is insolvent, it is not just the director’s interests which need to be considered. Those of outstanding creditors need to take priority in this situation, which means the company should not do anything which could worsen the position of creditors further, such as taking on additional debt or lessening the company’s assets. This is where the input of a licensed insolvency practitioner is invaluable; they will be able to determine what is in the best interests of your company’s creditors and therefore ensure you are adhering to your legal responsibilities as the director of an insolvent company.

If it is decided that liquidation is the best step for your recruitment company to take, your insolvency practitioner will handle the entire process of your company’s behalf. This includes identifying and locating company assets, liaising with your outstanding creditors, and ensuring your recruitment company is officially wound down and its name removed from the register held at Companies House.

“Shaun really helped me for quick legal advice in a stressful situation where I needed advice QUICK. Called me back within 30 seconds and gave me the advice I needed. Thank you”

Sam

 

Contact the Real Business Rescue Team today

Shaun Barton
Business Debt Expert

Rescue my recruitment agency

Just because your recruitment company is going through a bad patch, this does not always mean that closure through liquidation is necessary. At Real Business Rescue, our number one focus is always on saving businesses where this is deemed possible.

In order to maximise the chances of effecting a successful turnaround, we treat every business as the individual entity that it is, taking the time to understand the specific problems it is facing and the challenges encountered to lead up to this point. Taking this bespoke approach allows us to give tailored advice which is aimed at the pain points of your recruitment company, not simply the industry in general.

If your recruitment company has a track history of successful performance, and you have found your operations and income are slowly heading in the right direction once again, taking out a form of commercial borrowing could help you to bridge the cash flow gap caused by months of poor trade.

We have a team of commercial finance experts who can assist you in securing the most competitive and appropriate form of borrowing to solve your current struggles. With access to a huge range of lenders from traditional high street banks, through to more niche alternative lenders, we can source the very best product for you at the very best price. When seeking funding, it is important to ensure the borrowing works for your business both now, but also in the future; this is where the input of a commercial finance specialist is vital.

If, like many companies at the moment, your recruitment firm has fallen behind in its obligation to creditors – including HMRC – you may be better off trying to negotiate with them directly rather than borrowing more to repay them.

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HMRC arrears may be able to be settled by entering into a Time to Pay (TTP) arrangement, giving you the opportunity to spread the money you owe over a longer period of time. We can assist you with these negotiations, giving you the best chance possible of having your proposal agreed to. When negotiating a TTP, you need to strike a careful balance between offering enough to HMRC to show you can clear your balance in a reasonable time, and also not offering too much to give HMRC doubts as to whether you will be able to stick to the agreement long-term. With our expertise, we can help position your proposal just right.

If your debts are spread between a number of creditors, however, a Company Voluntary Arrangement (CVA), may be more suitable. This also involves entering into formal negotiations with creditors in order to reduce your current monthly repayments, however, this must be done through a licensed insolvency practitioner.

A CVA lasts anywhere between 3-5 years, and your appointed insolvency practitioner will be involved in the arrangement for its duration. They will act as supervisor, and will essentially be the ‘middle man’ between you and your creditors who are included in the CVA. You will make your monthly payment to the insolvency practitioner, who will then distribute this amongst your creditors as agreed.

Company administration is another insolvency process which may be suited to companies which either have a chance of being rescued, or would benefit from this process prior to being liquidated. When a company is placed into administration, a moratorium is placed around the business which acts as a legal barrier, preventing both current and threatened legal action.