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Close my bar or Nightclub business

Rescue, Recovery, and Closure Options for Bars and Nightclubs

The nighttime industry is valued at £66bn and employs in excess of 1.3 million individuals across the country. Increases to the National Living Wage, chronic staff shortages, and ever-changing consumer preferences have seen company liabilities increase and pressure continuing to mount on this economically important sector. 

If your business is experiencing financial distress, creditor pressure and can no longer afford to keep the doors open, you may need to consider an insolvency procedure. A licensed insolvency practitioner can ascertain the best route to facilitate an orderly exit and settle outstanding affairs with creditors. If your business no longer has the income or cash flow to continue trading, company liquidation may be a suitable route.

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Close a bar or nightclub via company liquidation

A Creditors’ Voluntary Liquidation (CVL) is a formal insolvency procedure initiated by the company shareholder/director to bring the business to a close. A licensed insolvency practitioner will be responsible for the sale of company assets, including property, equipment, machinery and stock. Once asset value has been realised, the generated funds will be distributed to creditors in priority order.

An alternative to company liquidation is transferring ownership of your bar or nightclub to an actively interested buyer. You may be able to sell part or the whole of your business if it holds value, however, the suitability of this route will be determined by many factors. A member of the Real Business Rescue team can help assess the options available for your bar and club.

Putting a bar or nightclub into company administration may be an option if your business is insolvent and facing increasing pressure from creditors.

A licensed insolvency practitioner can help you take the right step, however, it is vital to seek early assistance as this will increase your chances of recovery and the number of options available to you. An insolvency practitioner will guide you through the liquidation process to close your bar and nightclub and explain how this will impact the future for employees and creditors. If there is a possibility of recovery, your appointed insolvency practitioner will explore a potential restructuring of the company.

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Rescue my Bar & Nightclub business

If your bar and nightclub business is experiencing financial distress, creditor pressure and can no longer sustain existing liabilities, a licensed insolvency practitioner can advise you on the best route to rescue your business. There are multiple recovery solutions, such as company administration, company restructuring or alternative finance which can help get your business back on track.

If your business is struggling to maintain financial commitments due to poor cash flow, a Company Voluntary Arrangement (CVA) may be a suitable route to assist in your recovery. A CVA or Fast-Track CVA is a formal insolvency procedure which involves agreeing with creditors to restructure liabilities into affordable instalments. By lightening the load of your existing financial commitments, your bar and nightclub business stands the best chance of returning to a profitable position.

As an alternative to a CVA, Company Administration is a formal insolvency process which can help induce recovery and manage outstanding affairs with creditors. This formal insolvency process protects your business from legal action against creditors, giving you the much-required breathing space to plan without the impending threat of a winding up petition. Company Administration transfers control to the appointed licensed insolvency practitioner who will act as the administrator, and work towards rescuing the company as a going concern, or else achieving a better result for creditors than would be possible if the company was wound up without first going into administration..

Commercial Finance can provide a cash injection for your business, helping you replenish stock, attract customers and maintain supplier relationships. By removing cash flow limitations, you can invest in your business, repay outstanding creditors and continue trading successfully. There are multiple forms of commercial finance products which can help achieve your specific end goal.

Director redundancy for Bar & Nightclub owners

If you are the director of your pub or nightclub business and your company enters liquidation, you may be entitled to director redundancy if you have employee status. You can claim director redundancy if your business has been trading for two years or more and you now wish to take the liquidation or administration route as your business is insolvent. In addition to director redundancy, you may be able to claim statutory entitlements such as holiday pay, notice pay and unpaid wages.

It is a common misconception that directors are not entitled to redundancy pay. However, as with any other employee of your bar and nightclub business, you may be able to claim redundancy. Director redundancy is supported by the Redundancy Payments Service (RPS) and payment is made from the National Insurance Fund.

A claim for redundancy for directors, can be submitted pre-liquidation or post-liquidation, however, this must be within 12 months of your business entering the liquidation process. To qualify for director redundancy, you must be working 16 hours per week or more for your bar and nightclub business, be under an employment contract for a minimum of two years and have regularly taken a salary through PAYE.

During the liquidation process, your licensed insolvency practitioner will be able to direct you to a fully regulated, independent claims management firm specialising in director redundancy who will assess your entitlement.

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