5 Tips to Help Your Company Get through Insolvency

As far as a business owner is concerned, having your company face insolvency will likely be one of the toughest periods of their corporate life. The insecurity of not knowing whether you can continue running the business or will have to shut it down can be nerve-racking....


5 Tips to Help Your Company Get through Insolvency
© image from unsplash

Share this

To help you with it, we list out five tips that can help you pull your company through the insolvency. 

Look For An Informal Agreement
When you know that your company will soon be in no position to repay the debts of its creditors, take a proactive action and approach those creditors. Explain your situation to them and try to come up with some kind of mutual agreement. Though the creditors will be furious, they are more likely to try to cooperate with you rather than spend their time and money taking the company to the courts. 
Restructure
One of the key points to keep in mind is to keep your current business expenses to a minimum. Since you are already insolvent, you clearly will be unable to meet all expenses as usual. So, make a list of expenses that you consider non-critical for your business and cut it down.

For example, suppose that there are 40 employees in the firm doing a data entry work which can be outsourced. Now, if this decision will allow you to reduce the data entry expenditure by 60%, then you should definitely move ahead with it. The more money you can save on expenses, the better.

Extend Payment Period

You can also try to get the creditors agree to a Company Voluntary Agreement (CVA). What this will allow you to do is to pay the existing debt over a period of time, either in part or full.  The time period can range from 12 months to 60 months. You will need at least 75% of creditors to agree on this in order to make the CVA agreement legal and binding. 

Administrator Order 

Another thing you can try out is to obtain an administrative order in the name of your company. By doing so, an insolvency practitioner will take over your company to decide on how to run the business and how to repay the current debt. During this time, the creditors cannot take any action against the company. However, if the practitioner feels that your business is as good as dead, they will move ahead with selling the company to repay the creditor’s loans. 

Personal Wealth 
The last option is to inject your own wealth into the company in order to revitalize it. However, keep in mind that this can be quite dangerous. After all, you are dealing with a company which is facing insolvency. And if the company gets shut down, then not only will you lose your business, but you will also lose all the money you invested during its last period.

It is also recommended that you consult a company insolvency advice group to manage the issue. Since they are professionals in this line of work, they will be in a better position to give you specific advice on how to save your business. 


GETSCOPE

A visual, intuitive, complete ...

Rianu

Rianu an API first ...

Parklio

Smart Parking Barrier

Parabola

Become a builder

Using Instagram for marketing your business

Using Instagram for marketing your business

More marketers are using images in social media marketing and due to its millions of users, the popular social media ...


Top 5 Tips For Staying Healthy, Productive And Sane In An Open Office

Top 5 Tips For Staying Healthy, Productive And Sane In An Open Office

Open offices are something that more and more business are looking into and have been a staple in many industries ...


Increase Productivity And Employee Retention Through Job Sharing

The patterns of doing jobs have evolved to become more ...


Why Do I Need A Car Insurance? The Benefits Of A Comprehensive Auto Insurance

The joy of driving your car listening to one of ...


How is the diversification of board members evolving businesses?

When you think back to what a typical board of ...


ABOUT STARTUPINSPIRE
StartupInspire is a inspiration gallery for startup's, where a high quality of culture and quality placed from around the world.

FULL SITE SPONSORSHIP
We partner with sponsors whose products and services we love. Currently, StartupInspire has no sponsor.

STARTUPINSPIRE SUPPORT
Send us a question and we'll respond as soon as possible, usually within few hours. You can also email us directly at hello@startupinspire.com

Privacy Policy Cookie Policy