Helping Your Business Survive The COVID19 Crisis
How RBBC Can Help If Your Business Is Struggling
It is fair to say that there are more business rescue options available to a limited company or limited liability partnership than to an individual sole trader or partner. As a sole trader or partner (unless you are in a limited liability partnership) you are personally liable for the debts of your business. If you are unable to pay these debts you risk being taken to court, having your assets seized and potentially being made bankrupt by your creditors.
If you are facing a personal debt crisis there are charitable organisations like StepChange or Citizens Advice Bureau who can help you. They can make arrangements with creditors to give you time to pay and can also discuss other options with you such as a DRO (Debt Relief Order) or IVA (Individual Voluntary Arrangement). If you feel your business can be saved please call us. Our initial consultation is free of charge.
Please be aware that whilst limited liability will probably protect you as an individual from recovery action by business suppliers, your company’s bank are likely to insist on personal guarantees in respect of any loans, overdrafts or other financial assistance given to the company. It is therefore important to take independent legal advice before signing to personally guarantee a company’s liabilities in any way. You also need to be aware of the fixed and floating charge/debenture clauses that banks and other lenders tend to insert in the small print of any agreement as these could limit the options available to you if you find your business in need of additional financial assistance.
If your limited company is insolvent or facing potential insolvency we will enlist the help of a Licensed Insolvency Practitioner to help you to plan the best course of action. This may range from entering into Administration to considering a CVA (Company Voluntary Arrangement) or even CVL (Creditors’ Voluntary Liquidation). However, if it is felt that your business could potentially trade profitably again once the debt has been removed there are options available whereby a new company can be formed to purchase the assets of the old company. This is known as a Pre-Pack Administration arrangement. Please call us in the first instance to discuss your circumstances. There is no charge for our initial consultation.