Company insolvency
Company Insolvency AdvisoryUnderstand the ProcessBefore You Are Inside It
What insolvency actually means, which test your company fails, what each process involves, and what it means for you personally, explained by advisers who act for directors rather than creditors.
Free initial advice · Confidential · No obligation · Lines open 8am to 6pm · Introductions to licensed insolvency practitioners
Insolvency explained from the director's side of the table
Insolvency is a technical state with a legal definition, not a judgement about you or your business. Knowing whether your company meets that definition, and what follows if it does, is the difference between managing a situation and being managed by it.
What this service is
An independent review of whether your company is insolvent, on which test, and what that means in practice. We explain each available process, what it costs, how long it takes, who ends up in control and what happens to you personally.
Where a formal process is the right answer we introduce you to licensed insolvency practitioners and stay alongside you throughout. We hold no insolvency licences ourselves, which is precisely why our assessment of whether you need one is worth having.
Who it is for
Directors and shareholders of limited companies that are insolvent, close to it, or being told they are by a creditor. It is equally useful for investors trying to understand the position of a company they have backed.
It is not a personal insolvency service. We do not advise on personal debt or bankruptcy.
When it is needed
The moment there is a realistic question about whether the company can pay its debts as they fall due. That question changes your duties immediately, and the steps taken from that point are the ones examined later.
It is needed urgently where a statutory demand or winding-up petition has been received, where the bank has withdrawn a facility, or where enforcement action has begun.
Why independent advice matters here
Once appointed, an insolvency practitioner acts for the creditors as a body and has a statutory duty to investigate directors' conduct. That is how the system is designed to work, and it is also why every director should have independent advice before that appointment.
We act on behalf of directors and investors. Our function is to make sure you understand the process, your duties and your exposure before you are inside it.
Why delay is the expensive option
Insolvency law places specific obligations on directors from the point insolvency is reasonably apparent. Almost every serious personal consequence flows from what was done after that point.
Wrongful trading
Continuing to incur credit when there is no reasonable prospect of avoiding insolvent liquidation can result in a personal contribution to the company's losses.
Preferences
Payments that put one creditor in a better position than others, particularly connected parties, can be reversed and recovered.
Transactions at an undervalue
Assets sold or transferred for less than they are worth in the run-up to insolvency can be set aside.
Misfeasance claims
Breaches of directors' duties can lead to personal claims brought by the office-holder for the benefit of creditors.
Disqualification
Conduct is reported in every insolvent liquidation. An adverse report can result in disqualification proceedings.
Loss of control
A creditor-driven compulsory liquidation removes every remaining choice from the director. Acting earlier keeps the decision yours.
Mistakes we see directors make
- Waiting until the winding-up petition hearing to take advice
- Taking further credit from suppliers who will not be paid
- Paying the loudest creditor rather than understanding the priority order
- Selling assets quickly and cheaply to raise cash
- Assuming that limited liability means no personal consequences
- Speaking first to a practitioner who will be appointed rather than to an independent adviser
How we work with you
A defined sequence, so you always know what happens next and what is expected of you at each stage.
- 01
Free first call
We establish quickly whether the company meets an insolvency test, and how urgent the position is.
- 02
Position review
Assets, liabilities, cash flow, creditor pressure, guarantees and the director's loan account are reviewed together.
- 03
Processes explained
Administration, company voluntary arrangement, creditors' voluntary liquidation, compulsory liquidation and restructuring, with cost, timescale and control set out for each.
- 04
Route chosen and introductions made
We recommend a route, introduce you to a licensed insolvency practitioner where one is needed, and prepare you for that meeting.
- 05
Alongside you throughout
We remain involved while the process runs, so there is always someone whose duty is to you.
What you get out of it
You understand the position
Which test the company fails, on what basis, and what that obliges you to do differently from today.
Control retained where possible
Directors who act before a creditor forces the issue keep a meaningful choice about which process is used.
Personal exposure mapped
Guarantees, loan account, dividends and conduct risk are all identified before a process begins.
Prepared, not blindsided
You go into the first meeting with a practitioner knowing what will be asked and why, rather than reacting to it.
Access to the right specialists
Licensed insolvency practitioners, independent valuers and specialist HMRC input, introduced as required.
Available around the clock
Lines are open 8am to 6pm, seven days a week, including the weekend a petition threat arrives.
Company insolvency in detail
Two statutory tests define insolvency, and several distinct processes follow from it. Which one applies determines the options available.
The two insolvency tests
The cash-flow test asks whether the company can pay its debts as they fall due. This is the one most companies fail first, and it is the practical, day-to-day measure.
The balance-sheet test asks whether liabilities, including contingent and prospective liabilities, exceed assets. A company can fail one test and pass the other. Failing either has consequences for directors' duties, which is why the assessment should be deliberate rather than assumed.
The processes available
Each of these serves a different purpose, and the choice is driven by whether a viable trade can be preserved.
- Administration, a moratorium on creditor action while a rescue or better realisation is pursued
- Company voluntary arrangement, a binding agreement with creditors to pay an agreed sum over time
- Creditors' voluntary liquidation, an orderly, director-initiated closure of an insolvent company
- Compulsory liquidation, closure imposed by the court on a creditor's petition
- Members' voluntary liquidation, for solvent companies only, where creditors are paid in full
- Restructuring outside a formal process, where the trade is viable and funding is available
How directors' duties shift
While a company is solvent, directors act to promote its success for the benefit of members. Once insolvency is reasonably apparent, the interests of creditors as a whole take priority.
In practical terms that changes how you treat new credit, payments to particular creditors, asset disposals, drawings and dividends. Documenting decisions and the reasons for them from this point onwards is one of the most valuable things a director can do.
What an office-holder investigates
Every insolvent liquidation involves a review of the company's affairs and a report on directors' conduct. The office-holder examines asset transfers and the prices paid, payments to connected parties, the director's loan account, dividends declared, when the director knew the company was in difficulty and what they did next.
The presence of contemporaneous independent advice is a material factor in how that conduct is viewed. That is a large part of what we provide.
Who we introduce you to
The insolvency practitioners we refer directors to hold credentials including Fellow of the Insolvency Practitioners Association, membership of the Association of Business Recovery Professionals, the International Association of Insolvency, Restructuring and Bankruptcy Professionals, and the Turnaround Management Association.
We also maintain our own panel of auctioneers and valuers, some RICS-associated depending on the case, and work with a retired former HMRC inspector on specialist HMRC matters.
Where we advise
Our main office is near Alton in Hampshire, with further offices in Manchester, Leeds, Bradford and Birmingham and a registered office in Northampton. We advise directors nationwide.
Questions directors ask us about this
How do I know whether my company is insolvent?
There are two tests: whether the company can pay its debts as they fall due, and whether its liabilities exceed its assets including contingent and prospective liabilities. Failing either matters. We assess both on the first call.
What should I do first?
Take independent advice before taking further credit, paying particular creditors or disposing of assets. Those are the three areas where well-intentioned decisions most often create personal liability.
Will I lose control of the company?
In a director-initiated process you retain meaningful influence over which route is taken and when. In a compulsory liquidation driven by a creditor, control passes away from you entirely. That difference is the main argument for acting early.
How much does insolvency advice cost?
Our initial advice is free, confidential and carries no obligation. The cost of any formal process depends on the size and complexity of the company and is confirmed by the practitioner before anything is appointed.
Can the business be saved?
Sometimes. Where the trade is viable and the balance sheet is the problem, administration, a company voluntary arrangement or a restructure may preserve it. Where the trade itself has gone, an orderly closure is usually the better answer, and we will say so.
Will I be investigated?
Directors' conduct is reviewed and reported in every insolvent liquidation as a matter of course. For most directors that is uneventful. Knowing in advance what will be examined, and dealing with anything that needs attention, is what makes it uneventful.
A winding-up petition has been threatened. Is it too late?
No, but timing is now critical. Advertisement typically triggers a bank freeze and dispositions after presentation can be void. Call before the hearing date.
Are you insolvency practitioners?
No. We are a director advisory firm acting for directors and investors and hold no insolvency licences. We introduce you to practitioners licensed under the Insolvency Act and remain alongside you throughout.
Is the conversation confidential?
Entirely. Nothing you tell us goes any further and no creditor is contacted on your behalf without your instruction.
Do you cover my area?
We advise nationwide, with offices near Alton in Hampshire and in Manchester, Leeds, Bradford and Birmingham, and a registered office in Northampton.
Still not sure it applies to you?
Describe the situation in one call. If this is not the right service for you, we will say so and point you to the one that is.
0330 223 5754Free · Confidential · No obligation · Lines open 8am to 6pm, 7 days a week
Understand the process before you are inside it
A free, confidential call tells you whether the company is insolvent, which routes are open and what each one means for you personally, while the choice is still yours to make.
0330 223 575407770 666896- The initial conversation is genuinely free and carries no obligation
- Everything you tell us stays between us
- We are independent: we act for you, not for your creditors
Free, confidential and no obligation. Company insolvency and director advisory only; we do not advise on personal debt.