Contracts had not been costed properly and the accounting system was non existent. The company was leaking money and when we scratched the surface it was clear that large debts had built up.
Administration
Mr S. Osman. Kidderminster
"I thought that entering administration would be the end but instead it bought us time and meant we were able to restructure the business."
When a company enters into administration it is immediately protected from aggressive creditors and further legal action. Administration buys the company time and enables an emergency strategy to be formulated.
Under administration a Licensed Insolvency Practitioner is appointed and has the job of deciding the company’s future. If the company is fundamentally sound the Administrator will look to implement a recovery plan aimed at streamlining the business and maximizing profits.
If it is apparent the company has no future then it can be sold or liquidation can commence.
At the Insolvency Practice we are experts in company administration and will guide you through the whole process.
Key Features:
- All legal action against the company is suspended
- A Licensed Insolvency Practitioner is appointed
- Administration will result in a Recovery Plan, CVA or Liquidation
Pre-pack administration
If the Company has assets but is struggling to pay creditors through lack of cash flow then another option may be for the Directors to purchase the business back from the Administration.
This is often called a ‘pre-pack administration’. A pre-pack can enable a profitable business to trade without disruption through the insolvency process, protecting staff jobs and business goodwill by the Administrators selling the business to a ready purchaser on the first day of the Administration.
There are certain requirements and formalities that have to be met, including a potential review by an independent panel of the deal (Pre Pack Pool) before it goes ahead. One of the other most important requirements is that the business be marketed widely to ensure the best value is obtained. The requirements are there to protect creditors from some directors trying to use the Administration process to buy the Company’s assets back cheaply.
Administration is an involved process and therefore the sooner a Licensed Insolvency Practitioner is involved, the better the chances of saving the business will be.
For free advice on administration please call us on 0800 014 1486. We are waiting to take your call.
To find out the best option for your business try our free...
If you are being threatened by creditors and have outstanding bills, you need to take immediate action. If the problem is not addressed quickly it may be too late to save your business and you could become personally liable for the debts. At The Insolvency Practice we can ensure you remain protected and show you the best way to clear your business debt.
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