Insolvency does not always mean the end of the business.
Sometimes the Company fails but the business survives.
There is a real difference between the legal entity and the trade it carries on. Rescue and sale options exist, but they depend heavily on acting early enough for them to be available.
Explore the options while you still have them.
4 THINGS EVERY DIRECTOR SHOULD UNDERSTAND
Formal arrangements with creditors, and processes that pause enforcement, can give a viable business room to recover.
These options need a business that can trade profitably going forward, and they need time.
Rescue options close as the position deteriorates.
A business can sometimes be sold as a going concern, preserving trade, contracts and jobs, even where the Company cannot continue.
Assets must be independently valued and sold properly.
A failed Company does not always mean a failed business.
Directors can buy the business back, but sales to connected parties face additional scrutiny and independent review.
Done properly this is entirely legitimate. Done informally it creates serious problems.
The rules exist to protect you as much as creditors.
Re-using the name of a liquidated Company is restricted by law for several years, and the restrictions are wider than most Directors expect.
Getting this wrong can mean personal liability for the new Company's debts.
Never re-use a name without taking advice first.
THE COMPANY AND THE BUSINESS ARE NOT THE SAME THING.
Understanding the difference early is what keeps rescue and sale options open to you.
That is the right instinct. Value sits in your trade, your people and your customers, not only in the balance sheet.
Some of that value can often be preserved, even when the Company itself cannot be.
What matters is that any sale or rescue is done openly and at the right time.
Don't move assets out quietly
Informal transfers are reversible and create personal claims.
Don't sell to yourself informally
Connected sales must be independently valued and documented.
Don't start a new Company first
Sequence matters enormously, and getting it wrong is costly.
Don't re-use the trading name
Restrictions apply for years and carry personal liability.
Don't leave it until rescue is impossible
The best options need a business that is still trading.
A confidential discussion today could help protect you tomorrow.
Tell us the basics and we'll call you back — free, confidential, no obligation.
THIS WEBSITE PROVIDES GENERAL INFORMATION AND DOES NOT CONSTITUTE LEGAL OR INSOLVENCY ADVICE. Your position depends on the individual circumstances of each Company and Director. You should obtain advice from an appropriately qualified professional, including a licensed insolvency practitioner where appropriate.
