Corporate Debt Solutions

You could be guilty of wrongful trading without realising it if you are, you could become personally liable for the debts of your Company

If youre a Director of a Limited Company & you have Corporate debts the first thing to appreciate is that you must separate your personal debts from your Corporate debts.

Limited Companies are separate legal entities with their own contractual capacity. When you enter into financial agreements as a Limited Company the debts are the liability of your Company & not you personally (unless you signed personal guarantees or youre found guilty of wrongful or fraudulent trading).

There are various Corporate debt solutions, including;

1. Administration

Company Administration is designed to protect companies from their creditors while a restructuring plan is developed. Click Here For More

2. Company Voluntary Arrangement (CVA)

There is legislation that enables a company to make a private arrangement with all its unsecured creditors. The CVA (Company Voluntary Arrangement) procedure was introduced by the Insolvency Act 1986 IA86 and is simply a formal mechanism which permits a company, which has debt problems, to reach a compromise with its creditors on the repayment of its debt. Click Here For More

3. Administrative receivership

Administrative Receivership is a procedure that can only be instigated by a secured creditor with a valid floating charge over the assets of the company. This is usually the companys bank. Click Here For More

4. Liquidation; There are 3 types of liquidation

(i) Members Voluntary Liquidation

A Members Voluntary Liquidation MVL is a voluntary procedure to wind up the affairs of a solvent company.

(ii) Creditors Voluntary liquidation

Creditors Voluntary Liquidation CVL is the process where the directors of an insolvent company can voluntarily take steps to wind up the company. The directors call meetings of the companys shareholders and creditors to consider resolutions to wind up the company and to appoint a liquidator.

(iii) Compulsory liquidation

Compulsory Liquidation, usually referred to as Winding-Up, is the process to wind up an insolvent company through the courts. Click Here For More

5. Business Rescue / Turnaround

Turnaround involves the restructure of a financially challenged company with or without the use of a formal insolvency procedure. This is only relevant for companies that have a viable business that can, if freed from debt, trade profitably. Click Here For More

6. Pre-Pack Administration

If your business is facing huge problems and legal threats, there is a powerful, legal way of selling the business on to a third party, a newco or to the existing directors. This is called pre pack administration sale. Click Here For More

As with personal debt solutions, selecting the right Insolvency practitioners is just as important as selecting the right solution. If you need help with your corporate debts and youre not sure which debt solution is right for you, give us a call on 08000 842 844 now.