Voluntary administration

Voluntary administration

Save your business with voluntary administration.

Is my business insolvent?

Signs that your business may have a solvency problem include:

  • Spending more time "fire fighting" than running the business
  • Cashflow problems
  • Problems paying Inland Revenue
  • Problems paying employees
  • Overdue debts
  • Regularly negotiating deferrals and special repayment arrangements with creditors
  • Formal demands for payment from creditors
  • Liabilities exceed assets

 

Buy time with a voluntary administration

The first reaction to business trouble is often to ignore it. Avoiding calls from your creditors or injecting your own money into a failing business is not the best long-term solution. There are a number of restructuring options, such as voluntary administration that may enable a business to survive and avoid liquidation. The directors of a company can appoint an independent administrator who will suggest a recovery plan for creditors to consider.

 

Why voluntary administration?

  • Giving the company breathing room to restructure and survive
  • Preventing creditors from taking action during the restructuring period, such as court proceedings, enforcing charges, making demands under a guarantee or taking possession of property
  • May provide a better return for the owners and creditors than they would receive from immediate liquidation
  • May protect directors from personal liability, including reckless trading

 

Your responsibilities as a director

If your company trades while insolvent, as a director you can be held personally responsible for the business's liabilities. The sooner that you seek professional advice, the better the outcome may be for you, your creditors and shareholders. Taking a proactive approach lowers the likelihood of action being brought against you for a breach of your duties as a director.

 

What next?

Baker Tilly Staples Rodway has a team of business recovery specialists nationwide. Contact Tony, Jared or Phil to discuss whether a voluntary administration is right for your business. 

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