FAQs

Yes. We offer a free no obligation meeting to discuss you or your client’s circumstances and how we can help you. Call 0208 444 3400 or fill out our contact us form to find out more.

Our website provides a basic outline of the process of placing a company into Liquidation. However, for more in-depth information, please call us for a free confidential initial advice on what the best option is for you. Our number is 0208 444 3400.

You are insolvent when you cannot pay debts as they fall due, or when your total assets are worth less than your total liabilities. The first is often referred to as ‘cashflow insolvency’ and the latter is often referred to as ‘balance sheet insolvency’. Even if a business is profitable, it does not necessary preclude the possibility of it being insolvent.

A company can be insolvent because of a shortage of cash even while profitable, for instance when customers fail to settle their debts to the company, or when the company over-invests in marketing or equipment at the wrong time.

These factors may mean that the company is unable to repay debts as they fall due, even though the business is otherwise healthy. You should seek insolvency advice as soon as there are signs the business may be insolvent.

Trading on in the hope that things level out is a common mistake, but it is not by itself wrongful trading, and it does not make you personally liable for the company’s debts. Wrongful trading is a narrower test under sections 214 and 246ZB of the Insolvency Act 1986: it applies where a director knew, or ought to have concluded, that there was no reasonable prospect of avoiding insolvent liquidation or administration, and carried on anyway. It is a civil claim, and if it succeeds the court may order the director to contribute to the company’s assets. The risk grows the longer the position goes unaddressed, which is the real reason to take advice early.

Once a company is insolvent, or insolvency becomes likely, your duties as a director shift towards the interests of creditors as a whole, and you should be working to avoid worsening their position.

You should seek insolvency advice as soon as there are signs the company may be insolvent. Taking advice early, and acting on it, widens the options still open to you and is one of the clearest ways of showing you took the position seriously if your conduct is examined later. If it appears that cash-flow problems will be manageable in the long term and it is just for the time being that you are unable to repay creditors, you may be able to arrange additional financing like taking out a loan, chasing debtors, or selling assets which are non-essential to the business. It is also possible in some cases to come to a compromise agreement with creditors by revising terms of payment.

Creditors will normally be more inclined to agree this when they are aware that the alternative may be an insolvency procedure in which they receive less or nothing at all. You should investigate all alternatives which are available and take appropriate steps before creditors take legal action against you.

A winding-up petition is an application made by a creditor to the high-court for the compulsory liquidation of a company. It is the most serious action that can be taken against a company by creditors.

The petition costs a non-negligible sum of money to file and hence implies a serious motive on the part of the creditor to have the company liquidated in order for them to recover their debt. It can be issued by any creditor whom is owed a sum superior to £750.

As soon as a winding-up petition is received, it is imperative that the directors seek immediate advice from a licensed Insolvency Practitioner. The easiest option is to give us a call on 0208 444 3400 or request a call back via our contact us form. Our initial consultations are free and could prevent you from having legal action taken against you.

A statutory demand is a formal written demand for payment. The debt threshold depends on who the debtor is. Against a company, a creditor can use a statutory demand where the debt exceeds £750, and it is usually a step towards a winding-up petition. Against an individual, the debt must be at least £5,000, and the demand is usually a step towards a bankruptcy petition. Either way the demand gives the debtor 21 days to respond.

The debtor can pay the creditor in full, or pay enough to bring the debt below the relevant threshold, at which point that route is closed to the creditor. An individual served with a statutory demand can also apply to court to have it set aside. A company cannot: a company that disputes the debt must normally seek an injunction to restrain presentation of a petition. If the company or individual wishes to repay the creditor but cannot afford to do so and to protect themselves from further legal action, an advisable course of action may be to arrive at some kind of arrangement through a CVA in the case of a company or an IVA in the case of an individual.

For more information give us a call on 0208 444 3400 or request a call-back via our contact us form and we will give you straight-forward advice and offer a free consultation.

There may not be a lot of funds available but this is further reason to seek proper advice. The guidance of an insolvency practitioner may prevent creditors taking legal action against you and you falling into further financial difficulty hence the costs of paying for professional advice are comparatively small.

Remember that we offer an initial consultation free of charge.

The answer is to give us a call on 0208 444 3400 or request a call back via our contact us form. That way we can make a quick assessment of your personal or company circumstances.

Otherwise our services section explains the different options that are available and the processes that you as a director, sole trader or individual will typically undergo. You will also find other relevant information in our resources section.

Since the implementation of the Insolvency Act 1986, anyone undertaking the duties of liquidator, administrative receiver, administrator, supervisor or trustee must be a qualified insolvency practitioner.

Members’ Voluntary Liquidation: This happens when the company is solvent. The shareholders place put the company into liquidation, and the assets within the company are distributed to shareholders.

Creditors’ Voluntary Liquidation: This happens when a company is insolvent. It entails a process whereby company shareholders decide to put the company into liquidation, but assets are insufficient to cover debts of the company.

Compulsory Liquidation : This is what happens when the court issues a ‘winding-up order’.