If your client is facing financial difficulty or is looking to restructure their business, we can assist you to identify the options that exist, and work with you and your client to achieve them.
There may be several solutions available or there might just be one. It will depend on the financial circumstances of the business, company or individual. The insolvency procedures are set out in law, and their benefit is that the creditors must accept the legal consequences of the solution.
Preparing for insolvency
We always require a formal statement of the individual or company’s financial affairs in a formal insolvency, and in certain situations can allow your assistance in the production of the information as a cost of the insolvency procedure.
Using your services as existing accountant
Sometimes we require the business accounts to be completed to the date of insolvency, and tax, VAT and payroll records to be processed, up to and throughout a period of informal insolvency. The cost of doing so can be met as a cost of the insolvency procedure.
Creditors facing customer insolvency
Creditors rank according to law, and each class of creditor shares in the available cash by way of a dividend. Depending on the amount available, they may get none, some or all their money back. To qualify for a dividend, they should submit their claim to the insolvency practitioner dealing with the company. We can assist in the preparation of their claim, interpret the insolvency practitioner’s report, and assist with any voting decisions that your client may face.
Depending on how the company’s financial arrangements are structured, the bank may be one of the most influential creditors. If the bank holds a floating charge, it can request the appointment of administrators to the company in certain circumstances. It is important that where a company is facing insolvency, your client understands the bank’s options and how these can be exercised. We are happy to assist you and your client with any bank negotiation in the course of business restructuring or exit.
Director responsibilities on company insolvency
The advantage of a company with limited liability is that formal insolvency will unlikely affect the directors’ personal financial position, unless the directors have provided personal guarantees to any of the creditors. Accordingly, we can advise directors providing a personal guarantee in the course of refinancing, or set out their options if it is relied upon in the course of an insolvency.
A liquidator or administrator will have the right to examine transactions between the company and its directors, and to investigate and report on the conduct of the directors’ in the three-year period ending in formal insolvency. They will examine any directors’ loan accounts for recovery or claim purposes, and we can assist with any negotiations in respect of its recovery.
We can assist your client on their director responsibilities where the company is facing insolvency.
We have excellent relationships with lenders, invoice financers and asset based lenders. If your client is exploring their refinancing or working capital options, we would be happy to introduce you, at no cost to your client, and with no fee payable to Dunedin Advisory.