SAVE THE BUSINESS YOU HAVE WORKED SO HARD TO BUILD UP

If you have had your business for more than a couple of years then I’m sure you will have gone through blood sweat and tears (not to mention sleepless nights and money worries) to get your business to where it was at the beginning of March 2020.

Then, BANG! The World changed almost overnight and your business that had a bright and prosperous future is now probably fighting for survival. Well, it is possible, to save your business.

Firstly, in your mind, you need to separate your “Business” from your “Limited Company”. Although connected they are 2 different things. You may want to keep your “business” but get rid of the “Limited Company” that is insolvent and has too many debts and liabilities to survive.

If we use a pub as an example, although it is the same for most businesses. Let’s say you run a pub called The Red Lion. There can only be one Limited Company called “The Red Lion Limited” but there are actually over 600 pubs in the UK called The Red Lion. How is this possible? It is highly likely that the Limited Company sat behind many Red Lion pubs is a different name. It could be Joe Bloggs Ltd trading as The Red Lion. Joe Bloggs Ltd is the “Limited Company” and The Red Lion is the “Business”. It’s Joe Bloggs Ltd that is responsible for all the debts so it could be possible to liquidate Joe Bloggs Ltd getting rid of all the debts and then form a new Limited Company, XYZ Ltd, to take over the business (The Red Lion). Going forward the business “The Red Lion” carries on trading with a clean, fresh start and no debts.

The above is a very simplistic example and there are lots and lots of factors to be taken into consideration before formally going down this route, if at all. Some of the things to consider are:

  • Personal Guarantees
  • Overdrawn Directors Loan accounts
  • Who can and cannot be directors of the new Limited Company
  • S216 of The Insolvency Act regarding re-use of a company name
  • Legally purchasing the assets, including goodwill, of the old company
  • How to treat employees
  • Insolvent Trading
  • Wrongful Trading
  • Fraudulent Trading

Liquidating a company can be quite complex, is always a last resort and we are not suggesting you should go down this route but if, due to the recent lockdown and massive business interruption, your company is in so much financial difficulty that you cannot see a way out then it may be the only option. The penalties for directors of companies that break insolvency laws can be heavy fines, imprisonment and/or disqualification from being a company director so it is very important that advice is taken as early as possible and you do not break any rules and laws.

We are not liquidators and only Insolvency Practitioners can act as liquidators but we know some liquidators very very well. We deal with them on a daily basis, and have done for over 10 years, and we know the process of liquidating very well indeed.

We are here to provide you with the support and guidance encompassing the full spectrum of business rescue and recovery options. We can talk you through the variety of routes open to you and your company and suggest the most appropriate steps forward. This will always involve firstly trying to save the current Limited Company by negotiating with your creditors and looking at raising finance or investment. If, after looking at those options, we feel that an insolvency process could possibly be the best way forward then we will introduce you to one of the Insolvency Practitioners that we know who can then advise you on the insolvency options.

Once a plan has been decided, we will be with you every step of the way, guiding you and your company through this challenging time. Please telephone us anytime on 0800 980 2662 or 0161 825 8094. Our lines are open 24/7, 365 days a year and will be answered by a human being. No queues or voicemail.