If a company becomes insolvent (for example where it has net liabilities on its balance sheet) then the directors' responsibilities switch from acting in the best interests of the company and its shareholders to acting in the best interests of creditors. So should your company be or even become insolvent you actually have a legal obligation to improve the position for creditors if you can.
There are many things that can be done but common amongst these is that the sooner action is taken the more options are usually available and with better outcomes. Of course this is often in directors' self interest anyway as they, their family and friends are often major creditors.
This is a broad subject so we will limit our suggestions in this email to circumstances where a company is in the immediate run up to an inevitable formal insolvency. The main thing is to get some proper advice - and we would be delighted to provide that should you ever need it - but there are a number of specific steps you can take including:
None of this may be relevant to your company now but could be at some point in the future. If it is just get in touch and we will guide you through it.
If you would like to know more about our turnaround or insolvency services for businesses or individuals or wish to discuss any specific issues concerning underperforming businesses please contact me. We are happy to have an initial confidential and charge free meeting either face to face, on or off your premises or over the telephone. For further information telephone 0800 331 7417.