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What To Do About Business Insolvency
Most business owners or managers find themselves in a good deal of denial when their business is in trouble: they cannot face up to the inevitable and they find it very difficult to come to terms with the fact that the whole business will fail if something isn't done quickly.
Business insolvency figures are up 25% on this time last year according to the Insolvency Service (Feb 2009). The lack of available credit is causing immense problems to small and medium sized firms, who need funds to grow in some cases, and to re-finance expensive credit in others.
Cash flow issues are one indication that a business may be struggling and need assistance, but this is far from saying that a business cannot be saved. Since 2002 we have had a culture of 'enterprise' which has meant that the emphasis has been on saving the business, not necessarily the shell in which it is housed. Therefore there is an acknowledgement that a limited company can be shut down but the trade and assets from that company can be sold (often pre appointment) to a new entity set up for the purpose of taking on the employees and contracts of the insolvent business.
The advantage of saving the good parts of a company and saying goodbye to the bad parts is that the whole business can be saved. The new company will rise phoenix-like from the ashes (hence the term 'phoenix company' which is often used in such cases) and the new entity will be much leaner and healthier, with the old bits that were gradually strangling it trimmed off.
The benefits are many: directors will retain their salaries and the owners and shareholders will still have their incomes and, if applicable, they can still draw their dividends. Moreover, employees and staff will still enjoy their incomes (for the most part at least, as some restructuring may involve redundancies or the selling off of divisions or departments where necessary and possibly a curtailing of such things as bonuses and overtime). Suppliers will not lose out either, and this is an important considering that we all understand that business are all co-existant on each other, even to a global extent.
In a nutshell you can move from business insolvency to new debt free trading with a clean balance sheet and a tighter business overnight.
Literally 100s of companies have benefited from this approach. Thousands of employees have kept their jobs because of the assistance to the wealth creating directors that such things as positive phoenix companies, CVLs and pre-pack administrations have achieved; it's good for everyone: move forward and grow again.
Do not let the economic situation get you despondent. Know that help and assistance is at hand and that a decision made today could see you starting afresh within the week. Business insolvency may also be a new release.
About the Author If you're facing business insolvency problems don't face them alone. We are specialist insolvency solicitors and know about UK business insolvency (click to visit our site). We will solve your problems while safeguarding your personal assets.
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