The first issue for a club or society is to find out who is liable for the debts?
If the club/society is unincorporated (not a limited company) then the members are usually personally liable for all the debts. If the club is run within a limited company then the debts will rest with the company and not the individual shareholders - unless they have had to guarantee a debt.
The second issue is whether or not the club or society can be saved?
If not, then it is usually closure and liquidation. However, if it can be saved then the options might be administration with the club/society being sold onto new owners or a company voluntary arrangement (CVA) which can give up to five years to pay back some of the debt.
In all cases it is a good idea for the board or committee to seek professional advice from a licensed insolvency practitioner like us as soon as they are aware that there could be a problem - and that problem is likely to be not being able to pay the debts in full or not being able to pay them as they fall due.
Often a club or society will have members who may have very different and strong opposing views about how a difficult situation should be managed and this can cause its own problems when trying to agree a solution.
The most important point is once the board or committee are aware that there is a financial problem they should take advice as soon as possible to protect themselves and make sure that they do not become personally liable for the debts by continuing to trade.
Once advice is sought this the likely list of information you could be asked to get together:
The earlier you seek advice the better the outcome as you will have more options. We can help, contact our insolvency experts today on 0800 331 7414