If a business is in trouble, the main objective of the partners of Gibson Hewitt is to rescue it as a going concern.
Directors are often asked to guarantee their company’s debts so if the company is unable (or unwilling) to pay the debt for any particular reason the director can be asked to personally pay the sum due.
The two main tools for removing a company from the register, a common objective of restructuring plans, are:
When a company is experiencing financial difficulties, a Corporate Voluntary Arrangement (CVA) can be a very helpful mechanism towards ensuring its survival while, at the same time, guaranteeing fair treatment for its creditors.
If a corporate rescue or restructuring is not possible, the Directors will need to consider one of the more formal insolvency procedures allowed for by the Insolvency Act 1986. These are:
What is the difference between a voluntary and a compulsory liquidation?
The striking off or dissolution of companies is changing. There are two points that need to be borne in mind: one the ESC C16 concession and the other the Bona Vacantia concession.
There are two tests of insolvency – the cash flow test and the balance sheet test. If your business or company fails EITHER test you are deemed insolvent.
