Solutions for Companies
Get the Correct Advice - Early
There are five main types of insolvency proceedings, not all of which mean the end of a company or its business activity.
In each case, the primary concern is to recover as much of the money owed to creditors as possible. This can often be best achieved by finding a solution which allows the business to continue trading.
Where there is no hope of a trading solution, either a Creditor’s Voluntary Liquidation or a Compulsory Liquidation is likely to result. Once the company is in Liquidation, a Liquidator is appointed to manage the business and affairs of the company and investigate into the reasons why the company went into Liquidation. The aim of the Liquidator is to maximise the realisation of assets in order to pay a dividend (where possible) to the creditors of the Liquidation.
Administrations and Company Voluntary Arrangements are designed to allow a solution to be found for the company's survival, whereas Administrative Receivership was aimed at recovering monies owed to the secured creditor appointing the Administrative Receiver, though this could include the sale of the business as a going concern. Another option is a Moratorium under Part A1 of The Insolvency Act 1986 which enables eligible companies to gain protection from their creditors while they look to organise a rescue of the business as a going concern.
These days, Administrations and CVAs make company rescues a more realistic prospect than formerly. The key, as ever, is to take advice - and action - early.