According to government statistics, an estimated 8,514 companies entered into insolvency in England and Wales in the first half of 2017.
Few situations are as taxing for business owners and directors as facing the prospect of insolvency and we understand the requirement for sensitivity and confidentiality at this time.
First4Lawyers have a track record of assisting companies facing tough circumstances. If your company is in difficulty and you need to know more about the options and legal assistance available to you, get in touch with our specialists.
What are company insolvencies?
A company becomes insolvent when it can no longer pay its debts on time. In this situation, a business becomes subject to corporate insolvency law.If your company has become insolvent, there are two types of outcome provided for by the law:
- An attempt to rescue the business by paying off creditors and re-establish a sound financial footing.
- Liquidation of the company by selling off any assets and winding it up.
Depending on your particular circumstances, your company may take either one of these routes, or a combination of the two. Whatever the route, insolvency proceedings are designed to bring about the best possible outcome for everyone with a stake in the business.
What are the different types of company insolvencies?
Insolvency proceedings can take many different forms, and the best option for your business will depend on the specifics of your financial situation.
The specialist insolvency solicitors at First4Lawyers can advise and act on behalf of businesses going through the following types of proceedings:
- Insolvent restructuring – The company’s debt or its operations are restructured in order to make debt repayments more manageable.
- Liquidation – Where the company’s assets are handed over to a liquidator and, in most cases, sold off in order to pay creditors.
- Company voluntary arrangements – Also known as CVAs, these are where the business is rescued through the reduction of debt repayments.
- Receivership – Whereby creditors take control of assets and appoint a receiver to sell the asset to settle the debt if required.
- Administration – Which involves the freezing of creditors’ activity towards the company while an administrator establishes a plan to settle the company’s debt and, where possible, enable it to continue trading.
Specialist insolvency solicitors will examine the details of your financial predicament before advising and working on the best course of action. At First4Lawyers we work hard to ensure our clients fully understand the implications of all the options available to them before taking action.
What are the risks of company insolvency?
A skilled insolvency practitioner could be able to accurately predict the chances of a successful rescue of your business as soon as they have completed their initial investigation into your circumstances.
They may then tailor their approach in such a way that risks are minimised and the company’s best interests are put first, unless there is no way to save the business.
One important consideration that insolvency solicitors should flag up during the process is the shift of focus from shareholders to creditors, on behalf of company directors. The law requires that creditors do not suffer as a result of shareholders being given priority by a company during insolvency proceedings.
My company is facing insolvency – what should I do?
If your company is unable to pay its debts on time, you can seek legal advice to help you through every step of the insolvency process.
The insolvency practitioners at First4Lawyers have helped companies through all types of insolvency proceedings, and can offer the expertise and experience that will ensure you are properly advised on the best course of action for your firm.
To get started, call First4Lawyers for a no-obligation chat. If you are a creditor seeking to recover a debt from a company you believe may be insolvent, you can also contact us to discuss the best steps to take to ensure you are paid.