Business Rescue Centre Brochure Page 5

Pre-packaged Insolvency

Give my business a fresh start!

Pre-pack Insolvencies are where a director of a
company can foresee that the company can no longer
carry on supporting the weight of its current liabilities.

If your company is in financial difficulties we can
advise you on the many ways in which you can
lawfully bring your old company along with its debts
to an end but still retain its assets to enable you to
continue trading with a fresh start.

It is an offence to trade an Insolvent company knowing
that it is Insolvent. This in its self can result in personal
implications to the Directors.

How do I know if my company is Insolvent?

There are two main definitions of Insolvency under
current legislation.

A company is deemed Insolvent if:

l The value of its liabilities is greater than the value
of its assets

l That the company can not pay its debts as an when
they fall due.

If you have answered yes either of these questions
it is strongly recommended that you call

01442

233123

to seek professional guidance from one of our

experienced consultants on yours and your company's
position.

Company Liquidation

In broad terms Company Liquidation involves selling
off all the company's assets and then closing the
company down. The monies raised from the sale
of the company's assets will be paid to company
creditors. Liquidation draws a line under company
misfortunes and the concerns of directors. Liquidation
can be voluntary or compulsory.

Creditor's Voluntary Liquidation

Creditors' Voluntary Liquidation (CVL) is initiated by
the directors who, with shareholders, nominate an
authorised/regulated advisor to wind up the insolvent
company and act as a liquidator. The liquidator will
dispose of all company assets and share the proceeds
with creditors in accordance with their adjudicated
claims and priorities.

Administration

Administration is a legal process that protects insolvent
companies from agressive creditors until a solution
to the company's financial difficulities is ascertained.
When a company enters administration all legal action
against the company is stopped and the company has
protection from it's creditors while a plan is drawn up
to rescue it, sell it or liquidate it.

Action

An Administrator, appointed by the courts, will
determine the best way forward and then oversee its
implementation.

If it is decided that it is best to liquidate the company,
it may be possible to sell the assets to a new company
that will continue trading.

Insolvency

Compulsory Liquidation

Compulsory liquidation can be initiated by a creditor, or
government agency such as HM Revenue and Customs.
If they can demonstrate that they are owed

more than £750, a winding up petition is served. If the
order is made, a liquidator is appointed by the courts to
manage the company's affairs and liquidate its assets.

Compulsory liquidation can be seriously damaging to
directors and should be avoided if at all possible.

Members Voluntary Liquidation

A Members Voluntary Liquidation is the liquidation
of a solvent company by adoption of a shareholder
resolution to voluntarily wind up the business. The
shareholders also choose and appoint a liquidator.

Since a Members Voluntary Liquidation is not an
insolvency procedure, a Statutory Declaration of
Solvency must be made by the company directors.
Although the courts do not need to be involved, a
liquidator must be appointed.

A Members Voluntary Liquidation is also known as
Members Voluntary Winding Up, or simply Voluntary
Winding Up.

By speaking with one of our consultants they will
be able explain in a clear language how the above
procedures can be used to your benefit.