Help and advice for limited companies and their directors
While no director sets up a company expecting it to succumb to financial pressures, unfortunately this is a very real risk of business. If your business has become insolvent – or if you believe it is on the road to soon becoming insolvent – it is highly advised that, as its director, you seek the services of a licensed insolvency practitioner as the earliest possible opportunity.
As the director of an insolvent limited company, you have certain legal responsibilities and duties which you must adhere to. One of these is prioritising the interests of creditors once you become aware that the company is insolvent. By contacting an insolvency practitioner, you are demonstrating your commitment to shielding creditors from any further losses and consequently fulfilling your obligations as directors.
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Seek advice from a licensed insolvency practitioner
When a company is insolvent, this often means that trade will need to stop immediately in order to prevent the company’s financial position deteriorating any further, however, this is not always the case. A licensed insolvency practitioner will be able to advise you whether ceasing to trade is necessary, or whether it would be seen as advantageous to creditors if you were allowed to continue to trade – even if only temporarily – if this would result in higher returns.
A licensed insolvency practitioner will be able to talk you through the options available to your company which may involve embarking on a rescue strategy to stabilise the business and its operations, or else winding the company down in an orderly manner via liquidation.
Liquidation may be the best option for all concerned if the company’s debt problems have become too great to manage. As part of the process, all assets belonging to the company will be sold with the proceeds used to repay outstanding creditors as far as possible. The company will then be formally closed, and all remaining company debt will be wiped out unless this has been personally guaranteed.
If you have provided a director’s personal guarantee for any company borrowing which you are concerned about how to repay, we can provide you with personal debt advice with options only available in Scotland such as a Debt Arrangement Scheme (DAS), Trust Deed, or Sequestration.
I knew I needed to close my company but I wasn’t sure how to go about this with large debts that I was unable to repay. Scotland Liquidators clearly explained my options and held my hand throughout the entire process.
Catherine Muller | Director
I would highly recommend Scotland Liquidators to anyone considering closing their business. From the first phone call I knew where I stood and what my options were. I cannot thank them enough.
Jonathan Booth | Director
Scotland Liquidators helped me close my company last year after I made the tough decision to stop trading. My advisor was patient, knowledgeable, and supportive from start to finish. Many thanks.
Colin Franklin | Former CEO
