Eighteen months after the first national lockdown the wellspring of state aid has all but dried up and companies which benefitted from Government backed loans at the height of the pandemic are now facing the prospect of repaying those advances. There may not be the funds to do this and other creditors who have had to wait, may be knocking at the door.
If you are thinking:
What will I do if I can’t repay my Bounce Back Loan or Coronavirus Business Interruption Loan Scheme?
What are my options for repaying my Bounce Back Loan or Coronavirus Business Interruption Loan Scheme?
Can my business carry on without furlough support?
Is my business facing insolvency?
Should I seek insolvency advice?
Where do I go for insolvency advice?
You won’t be alone.
Directors who find their companies struggling to find the cash to meet their loan repayments and
other debts should seek advice sooner rather than later.
For those companies who are unable to manage their debts and for whom restructuring or an arrangement with creditors is not viable, insolvent liquidation may be the only option.
Directors have a duty to consider the interest of their company’s creditors when faced with insolvency and a creditors’ voluntary liquidation can be a quick route to closing down the business and dealing with the company’s debts in a structured way.
Directors have the powers to instruct an Insolvency Practitioner to assist with placing their company into liquidation, with a resolution passed by 75% of shareholders required to formalise the liquidation, and a second resolution passed by 50% of the shareholders to appoint a liquidator.
Creditors are given notice of the liquidation and whilst they cannot disturb the resolution passed by shareholders to liquidate the company, they can seek the appointment of a different liquidator should they wish.
It is the role of the liquidator to realise the company’s assets for the benefit of the creditors, in addition to investigating the company’s financial affairs prior to liquidation.
Any funds available after the payment of liquidation costs and expenses are paid to creditors in order of their priority.
Please do not hesitate to get in contact with our office should you need any advice or further information regarding insolvent liquidation. Call or WhatsApp us on 07706735834