Yes. Free advice on company debt comes from three places: your own accountant, sometimes; Business Debtline, a charity-run service; and licensed insolvency practitioners, including AABRS® , which offers a free first consultation. The three are not interchangeable.
Only a licensed insolvency practitioner can act as administrator or supervisor of a company voluntary arrangement, or as liquidator in a voluntary liquidation. In a compulsory winding up by the court, the Official Receiver is the liquidator first. An appointment also comes with duties that shape what the advice is worth to you. This page sets out what each source can and cannot do.
Your accountant
Your accountant already knows the numbers, and is often the fastest way to produce what any adviser will ask for first: up-to-date management accounts, a cash forecast and a full creditor list.
Insolvency is a separate licensed field. Unless your accountant holds an insolvency licence, they cannot take an appointment, and acting as an insolvency practitioner without qualification is a criminal offence under section 389 of the Insolvency Act 1986. Their time is also usually charged. Ask them to prepare the figures, and to refer you on for the insolvency question.
Business Debtline
Business Debtline is a free debt advice service run by the Money Advice Trust, a charity. It advises small businesses and self-employed people in England, Wales and Scotland, by phone and webchat, and is authorised by the Financial Conduct Authority.
It is a sound first call for a sole trader or a very small business that wants to understand its position and deal with creditor pressure. It does not take insolvency appointments. If a limited company needs a formal procedure, a licensed practitioner still has to run it.
A licensed insolvency practitioner
An insolvency practitioner is licensed by a recognised professional body: the Insolvency Practitioners Association, ICAEW or ICAS. They are bound by the Insolvency Code of Ethics and they are the only people who can take the appointment as administrator, as supervisor of a company voluntary arrangement, or as liquidator in a voluntary liquidation. Directors, members, creditors and the court start the procedures; the practitioner is appointed to run them.
A first consultation covers where the company sits against the insolvency tests, which creditors can act and how soon, and which routes are still open: a company voluntary arrangement, administration or a creditors’ voluntary liquidation.
There is one thing a straight practitioner will tell you in that first meeting. Advice before an appointment is advice to the directors. If the firm is then appointed as liquidator or administrator, its duty is to the creditors as a whole. It must also report to the Insolvency Service on the conduct of everyone who was a director in the three years before the insolvency, including the directors who first called.
That is not a reason to avoid the conversation. It is the reason to have it early, while the decisions are still yours and can still be made well.
What free advice does not cover
The consultation is free. If a formal procedure follows, the practitioner’s fees for running it have to be approved, usually by the creditors, and are normally paid from the company’s assets. Our page on insolvency practitioners’ fees explains how that works. Ask for the basis of any fee in writing before you agree to anything.
What to bring to a first consultation
- The latest filed accounts and current management accounts.
- An aged list of creditors, with HMRC shown separately by tax.
- Recent bank statements and a cash forecast, however rough.
- Any statutory demand, county court judgment or winding-up petition the company has received.
- Details of any personal guarantees you have given.
If the company has received a statutory demand, the 21-day period is already running. If a winding-up petition has been issued, read what to do about a winding-up petition and take advice the same day.
To book a free first consultation with AABRS® , call 0208 444 3400 or send us your details.