If you have a business that is struggling at present, you have arrived at the correct place to take expert advice on what to look out for and what to do if you want to avoid personal liability and correctly move your company through to rescue or closure.
You may already have ascertained problems with the business such as breaking through your overdraft limit on a regular basis, not having paid vat or tax for the last two quarters or months, moving to a new set of suppliers to make use of new lines of credit. What you also need to take on board and act upon are the following:
- As a director you can be personally liable for your company debts if you spot that your company is in trouble but disregard this and then increase the losses to creditors. So if you think you are in trouble and have any doubt that you can trade out of it you must take advice. Call an Insolvency Practitioner or debt advisor now.
- You may be too close to the problem to see the solution. An independent debt advisor is dispassionate and can offer non obligatory common sense advice.
- If you want to try to get out of the problem yourself, then you need to minute all the decisions that you make and why. Be prepared to be able to argue why decisions were taken. If the business does eventually fail despite your further efforts, you may be required to explain why you failed to act earlier to shut the business.
- Instead of running the risk highlighted above. Take the bull by the horns and make a call to an advisor.
- To enable an advisor to have an informed discussion, quickly set out your assets and liabilities, your income and expenditure, what you own and what is charged. As simple as that and they will be able very quickly to get to the heart of the matter. .
- Now what do you plan to do. Is this company going forward, or do you need to create a new co, possibly to take over what is left and profitable of your business. How will you do things differently? I know of a pub chain recently who spent £8,000 on soft fruit garnishes. Crazy. They were able to keep the gin and tonic brigade happy for half this amount. A simple change freeing up £4,000. You must have similar examples in your business.
- Until you decide where you are going, only commit to pay wages (and review your wage costs as well) and insurances (in case of disaster).
- If your plan allows you to move on, then call an advisor, and they can help you put a plan in place. If you cannot continue despite your plan still call for help as there will be another solution for you.
Information provided by Steve Thatcher of Help With Debt (UK) Limited and total debt solutions company.
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