Company directors worry about many things when running a business - workload, payment, staff issues, cashflow - the list is endless. But few things can be more worrying and stressful than having a winding up petition served upon the company.
Winding up petitions (WUP) rarely show up "out of the blue". They are almost always the result of director's ignoring the symptoms of insolvency ie. can the company pay its debts as and when they fall due?
Unfortunately, we are currently seeing a trend from creditors using WUP's as a method of forcing companies to pay their debts. While this may be deemed as a misuse of the WUP, it nevertheless cannot and should not be ignored if one is received. Once a petition has been advertised in the London Gazette, the company bank account will be frozen resulting in a cessation of trading!
If a company can prove it's ability and intention to satisfy the debt of the petitioning creditor, a validiation order can be applied for in order to unfreeze the bank account. This is a costly process as it requires the directors to appoint legal counsel to make the application. As the company bank account will be frozen, and access to company funds made impossible, the directors would have to fund this themselves!
If a company is experiencing cashflow problems and creditors are applying pressure for payment, it may be possible to make an arrangement or time to pay deal (TTP) with them in order to avoid this sort of aggressive action being taken. The HMRC for example will usually allow a company to apply for a TTP deal as long as the company is fully compliant and up to date with its filing of returns etc.
Warning! Any TTP deal requires full repayment of the debt and failure to satisfy the terms of the deal usually results in aggressive action from the creditor!
If a company finds that it's debts are insurmountable if payment is demanded in full and the directors acknowledge the fact that the company is insolvent (s123 Insolvency Act 1986) but still viable, a company voluntary arrangement (CVA) can be proposed to the creditors. If the creditors agree the proposal, this can enable up to 70% of the unsecured debts to be written off and the remaining debts restructured and repaid over a period of up to 5 years.
A CVA is a very discreet process and is not advertised, therefore, your clients need not know of the company's situation.
If your company is experiencing any of the issues mentioned above, why not call KSA Group on 0800 9700 539 or visit www.companyrescue.co.uk for free advice on all insolvency issues!
My name is Malcolm Gray and I am passionate about rescuing businesses! I aim to inform local businesses what tools Company Rescue can provide to help struggling but viable companies. We use CVA's, CVA and hive downs, pre-pack administrations and liquidations to restructure companies. I will give uptodate news and views on businesses in the area.
Tuesday 26 April 2011
Tuesday 12 April 2011
Take Advice Early
If I could give small business directors one piece of advice, it would be to take advice early!
If we were to wake up every morning feeling unwell, most of us would visit our GP to diagnose the problem and find a cure wouldn't we? Yet so many business owners do the exact opposite!
Creditor pressure is building up, clients aren't paying on time or at all, the bank overdraft is up to the limit each month, the taxman is writing letters asking why the PAYE is 2 months in arrears and the VAT is now due and then the 7 day warning letter lands on the mat. Sound familiar? This is usually the moment when a director decides to seek advice and KSA Group have provided many solutions for companies in this exact situation, but why wait this long when the indicators were there months before?
Terminal insolvency procedures such as compulsory liquidation and creditors voluntary liquidation are often the result of ignoring the symptoms mentioned above. We at KSA Group provide all of our clients with tools to monitor cashflow. If a company voluntary arrangement is to be proposed for a business, knowing the cash position of the company is vital and also required by the proposal if a company is going to be rescued.
If a business is struggling but still viable and advice is taken early, a CVA can be used to write off up to 70% of the unsecured creditor debt and restructure the rest over a period of up to 5 years and is a very powerful and discreet rescue procedure.
We at KSA Group provide FREE INITIAL ADVICE to businesses experiencing financial difficulties so why not call 0800 9700 539 OR VISIT WWW.COMPANYRESCUE.CO.UK And find a solution to your company's problems
If we were to wake up every morning feeling unwell, most of us would visit our GP to diagnose the problem and find a cure wouldn't we? Yet so many business owners do the exact opposite!
Creditor pressure is building up, clients aren't paying on time or at all, the bank overdraft is up to the limit each month, the taxman is writing letters asking why the PAYE is 2 months in arrears and the VAT is now due and then the 7 day warning letter lands on the mat. Sound familiar? This is usually the moment when a director decides to seek advice and KSA Group have provided many solutions for companies in this exact situation, but why wait this long when the indicators were there months before?
Terminal insolvency procedures such as compulsory liquidation and creditors voluntary liquidation are often the result of ignoring the symptoms mentioned above. We at KSA Group provide all of our clients with tools to monitor cashflow. If a company voluntary arrangement is to be proposed for a business, knowing the cash position of the company is vital and also required by the proposal if a company is going to be rescued.
If a business is struggling but still viable and advice is taken early, a CVA can be used to write off up to 70% of the unsecured creditor debt and restructure the rest over a period of up to 5 years and is a very powerful and discreet rescue procedure.
We at KSA Group provide FREE INITIAL ADVICE to businesses experiencing financial difficulties so why not call 0800 9700 539 OR VISIT WWW.COMPANYRESCUE.CO.UK And find a solution to your company's problems
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