Solutions for companies vary. It gets complicated very quickly. This page helps you understand what the technical names mean. Which option you take will depend on your specific situation. Call me or send me a question I will explain the specific options in more details and what is likely to apply to your situation. No obligation.
Workouts occur where directors of a company recognise issues with its business and take early action to prevent the situation from getting worse. The key is to get in early, engage with key stakeholders and come to an agreement on how to manage the company’s affairs. An independent perspective is critical in this circumstance.
This is an efficient process employed when a company is insolvent or likely to become insolvent, i.e. a company which is unable to pay its debts when they fall due. Voluntary Administration allows for effective restructuring of a company to achieve a desirable outcome for the company, its creditors and employees.
The primary objective of a voluntary administration is to greatly increase the likelihood of the company or business continuing. Secondly, voluntary administration can be used to provide a company with greater flexibility, and aims to provide its creditors with a better return than would be achieved by an immediate cessation of business.
Creditors’ Voluntary Liquidation
This is the most effective means of ending the affairs of a company. The directors of a company start the liquidation process. This is followed by a meeting of members and then creditors. It is a quick an effective way of winding up a company’s affairs.
A Court Liquidation occurs when a company is insolvent and the company and/or a creditor makes an application to the Court for the winding-up of the company and the appointment of a liquidator. To provide evidence as to the company’s insolvency, the creditor must demonstrate the company’s inability to pay its debts as they fall due. Serving a statutory demand on the company is the most common way to achieve this. Once the time period for the statutory demand expires, the company is deemed to be insolvent and a creditor may file an application for the winding-up of the company.
A secured creditor or court may appoint a receiver, or receiver and manager to manage some or all of a company’s assets. Most commonly, a receiver is appointed by a lender or financier who has loaned funds to a company. Where a company is in default of its obligations a receiver may be appointed to sell assets to repay the secured creditor. This may include the sale of the company’s business.
What are your options
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