Insolvency. It’s not a word anyone wants to hear. Yet with the global financial climate in turmoil it is a subject that many have to approach at some stage during their company’s journey.
What Does A Business 'Going Into Administration' Actually Mean?
Going into administration, or when a company “calls in the administrators”, is a legal process whereby the company hands over control to an insolvency practitioner, who acts as an administrator. Creditors may not take legal action against the company during the period of administration, and cannot apply to have it wound up, without the consent of the court or the administrator.
Topics: Administration
Advantages & Disadvantages Of Putting Your Company Into Administration
A company may consider administration as an alternative to liquidation if it believes things can be turned around. Therefore, it is an option for potentially viable businesses, which can deliver the best possible outcome for all stakeholders if it is successful. A successful administration can result in a solid business that is trading profitably and can engender confidence that its affairs are under control and that its prospects for continuing success are based on solid foundations.
Topics: Administration
I Can’t Meet My Business Debt Liabilities: What Can I Do?
Even the best managed companies sometimes hit a rocky patch where mounting debts can no longer be paid through cashflow or normal financing. This is commonplace and no cause for embarrassment. Many would say that it is simply a part of doing business.
Topics: Liquidation
Liquidation means terminating a company and selling off any assets it owns to pay some or all of the debts it owes. It is also known as winding up. A liquidation is carried out by an appointed licensed insolvency practitioner, acting in capacity of liquidator. A liquidation can be requested voluntarily by the directors or made compulsory by a court order, at the request of one or more creditors. Usually, it happens as a result of accrued debts that a company is unable to pay but it can also happen if the owner/directors simply want a solvent company to be dissolved and struck off the register of companies.
Topics: Liquidation
A Winding Up Petition is usually filed in court by a disgruntled creditor who feels that liquidating your company represents his best chance of receiving payment, or at least some payment, from your company. It is the second of the typical 3-step sequence to a hostile liquidation of your company. It is an extremely serious matter and needs to be dealt with immediately. Time is of the essence here.
Topics: Winding Up Petition
The Winding Up Petition Procedure Explained In 6 Steps
A Winding Up Petition is probably the most serious existential threat that a company can be exposed to. If the petition succeeds, the company will be placed into compulsory liquidation and will cease to exist. There is a fixed procedure and timetable for the various steps involved, and it pays to understand the process. It is also highly advisable for a company so threatened to urgently seek the advice of a licensed insolvency practitioner. The sooner this happens, the greater the likelihood of a satisfactory outcome.
Topics: Winding Up Petition
A Winding Up Petition is an extremely serious matter and is often taken as a final option by a creditor who has been unable to obtain payment from your company. There is little time remaining before the court hears the petition and the claimant’s grounds for bringing the action. If the company does not respond with a strong case for obtaining a stay or an injunction, then the court will issue a winding up order on the same day of the petition hearing. At that point, the company is in the hands of the Official Receiver and no longer owned by its owners or managed by its directors. However, there may be grounds for preventing the court from issuing a Winding Up Order when the petition comes before it for a hearing.
Topics: Winding Up Petition
2017 saw a flurry of letters from HMRC arriving on the doorsteps of Employee Benefit Trust (EBT) users. This is part of HMRC’s ongoing war on ‘tax avoidance’ schemes initiated in 2010. Employee Benefit Trusts have been used extensively since the 1980s to reduce the tax burden on employees. The idea is that salary payments are made not to the employee directly, but are paid to the trust by the employer. The employee then receives loan advances from the EBT.
Topics: News
The short answer is Yes but it is important to understand the limitations of this action. It may help to better understand what exactly a Winding Up Petition is and how the situation developed to the stage where the company was served with one.
Topics: Winding Up Petition