These are the ten things you need to know to get the best out of your meeting with us to discuss your company’s financial problems
1. This is a real turning point in your life, treat it as such!
Make sure you have identified in your own mind, and with absolute clarity, what you want to achieve first and foremost, and why. Then what your next best solution would be, and why. And then your third best. This will greatly help your decision-making. And you’ll probably find you won’t be able to save everything you now hold dear.
Challenge yourself – do you really want to carry on in a similar business, or do something else? If you want to do something similar, ask yourself what you are going to do differently, and how, this time around to make sure it’s a success?
2. The business and the company are not the same thing
A formal insolvency process can be used to split out a viable business from its insolvent company shell, protecting the business yet ridding it of debts it can’t pay. This isn’t debt avoidance, it’s finding a practical solution to real life problems. But is has to be done properly.
3. Smaller companies have fewer options and less time to act
Those on whom smaller companies depend provide less support when things go badly. Your bank, rather than supporting you, will go into self protection mode. It’s up to you and your advsiers to find a solution, and quickly.
4. There’s often nothing worthwhile saving in the smallest of companies
The informal way in which small companies operate often means the goodwill lies in the directors and key staff, rather than the company itself. There’s less reason to spend time, money and effort to save the company, it’s this that often makes liquidation the most appropriate route for small companies.
5. All formal insolvency procedures damage the business
Some just do more damage than others. You’ll need to know how the different informal and formal solutions effect your business.
6. Cost is a big issue in choosing any insolvency process
Every formal insolvency process is expensive, some more so than others. Cost is, in relative terms, a far bigger issue for smaller companies. This can mean, for example, that the cost of an administration of a small company can outweigh any benefits gained: a sale of the business and assets followed by a liquidation could be a less expensive option.
7. Not all insolvency procedures are the same
Each procedure has its own nuances, from the outside they seem subtle but they’e not. It’s absolutely key that the right procedure is chosen, and that can be determined by seemingly small factors. It’s important to consider all the options.
8. You’re not obliged to spend your own money to pay the insolvency practitioner’s fees
If there’s not enough money or assets in the company to pay for the insolvency process, there are alternatives. Couldn’t your money be better spent, say, to finance your new business?
9. Once the company goes into formal insolvency, you lose all control
The insolvency practitioner makes the decisions. It’s important you know his intended strategy, right from the planning stage.
10. Liquidation should not stop you earning a living
In the UK responsible entrepreneurs are encouraged to give it another go – indeed many of today’s most successful businessmen weren’t a success first or even second time around. However, setting up a phoenix operation isn’t always that easy as the banks, customers and suppliers are not always as supportive as you’d like them to be. An added complication is that the rules over re-using the company’s ‘name’, should the company go into formal insolvency, are unnecessarily complex. And if you breach those rules, there are severe penalties, including personal liability for the debts of newco should it fail.
Now you’re ready to meet with us! Give us a call on 01902 672323.