An increasing number of directors are finding it difficult to keep their businesses afloat in this uncertain economic climate. This has also let to an increase in household debt which has touched a large number of individuals nationally.
Insolvency Solutions for Companies
Administration
Administrations are primarily geared towards promoting the recovery of Companies that are or are likely to become insolvent by placing them under the control and guidance of a qualified Insolvency Practitioner (“IP”) at AABRS® . Each administration must pursue one of the following purposes, in this order of priority:
a. To rescue the Company as a going concern;
b. To achieve a better result for creditors as a whole than in a liquidation scenario;
c. To realise the Company’s property in order to make a distribution to one or more secured or preferential creditors. This is available only where neither of the first two is reasonably practicable and creditors as a whole are not unnecessarily harmed.
The IP as Administrator has the power to continue…
Company Voluntary Arrangement
Compulsory Liquidation
This procedure allows a Company to be wound up by order of the court following the presentation of a winding-up petition. It is usually started by a creditor who is owed money the Company has not paid, and a creditor does not have to try other ways to recover the debt first. It may also be an appropriate course of action where there is “management deadlock” within a Company, resulting in the Directors or shareholders being…
Creditor's Voluntary Liquidation
A Creditors’ Voluntary Liquidation is a process which the Directors start to formally close an insolvent company; it begins when the shareholders pass a special resolution to wind the company up. In a CVL the company can nominate a liquidator, but the directors must ask the creditors for their nomination. If the creditors nominate someone else, their choice prevails, subject to any application to the court within seven days. The Liquidator once appointed, will deal with realising any assets of the company and making distributions to creditors.
Members Voluntary Liquidation
This procedure enables the shareholders of a solvent Company to bring the business to a close via a formal process: the Directors make a statutory declaration of solvency, then the shareholders pass a special resolution and appoint the liquidator. This may be appropriate in cases where the business has simply ceased to trade, where shareholders wish to obtain a tax-efficient release of their capital ahead of retirement or…