If you’ve reached the point where your company is no longer solvent, then you’ll need to look at which options are available.

Insolvency Practitioners (“IPs”) often refer to their “toolkit”. The insolvency regulations are designed to provide a solution for (almost) every scenario which a company might find itself in. Although the number of face to face meetings has obviously reduced in the last 18 months, IPs will offer a free consultation with good reason. They need to get a real feel for what’s gone on, what’s happening now, and most importantly what the directors want for the future.

Which procedure is right for my company?

There’s a number of factors which will influence the options available to you:

• Who are the creditors, and are they supportive of some form of continued trade?
• Are employees supportive?
• Have any creditors already taken any enforcement action?
• Do you want to continue trading the company or business?
• Is some or all of the business viable?

The most effective way to understand your options is to speak with an IP as soon as you have concerns about cashflow and your ability to pay creditors. Small issues can often be resolved, and the company can get back to a better financial position.

How much does an insolvency practitioner cost?

IP fees can be a fixed fee, time costs, percentage of realisations or a combination. It’s very much case by case, and the IP will make a judgment on what they think will represent a fair and reasonable fee in those specific circumstances.

There’s no fee for any initial meeting and absolutely no obligation to proceed with anything. The first meeting is an open discussion about what can be achieved and what’s in the best interests of the directors and the company and its creditors.

If my company’s insolvent, how can I pay an insolvency practitioner?

The fees due to the IP will be paid using the proceeds from the sale of company assets. The IP’s costs are an expense of the insolvency process. If there’s insufficient assets to cover the IP fees, then company directors may be required to make a contribution to the costs..

Don’t delay taking action!

Don’t be concerned about the cost of the procedure needed – as soon as you know your business is in financial difficulty you should be seeking professional advice. It’s rare that a solution can’t be found, but it won’t be found without being proactive.

We always encourage company directors to speak to us early on – addressing cashflow issues in their infancy can prevent larger, irrecoverable problems becoming the end of the business.

Talk to us today on 0808 196 8676.