Fortis Business Rescue

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What are the methods of liquidation?

When you’ve made the strenuous decision to close your company, you need to consider your liquidation options to achieve this.

The liquidation options available to you are entirely dependent on the position you are in. Are you choosing to wind up your business voluntarily, or do you have no choice but to close your company due to creditor pressure?

The two variations of voluntary liquidation are Members’ Voluntary Liquidation (MVL) and Voluntary Liquidation. MVL is a process by which the company's shareholders or directors opt to put a solvent company into liquidation at the end of its life.

This is usually due to business owners pursuing different ventures or retiring. This option allows business owners to benefit from tax reliefs such as the entrepreneur's relief at 10%. Voluntary Liquidation is when a business is teetering on the edge of a financial crisis or may have already found itself insolvent; at this stage, business owners can volunteer to appoint a liquidator to begin the wind-up process.

Conversely, compulsory liquidation means you have been forced to proceed with liquidation by creditors.

This is usually following failure to settle invoices from creditors and tax bills from HMRC and is often a result of a court hearing where the judgement decrees closure of business as a resolution.

In this case, a liquidator will be appointed to the company, and directors have a legal requirement to comply with the liquidator's demands.

Worried about the liquidation process? Speak with Fortis today.

The initial conversation is free and strictly confidential.

Send us a message, call us on 0161 694 9955 or email [email protected].

With Fortis, you're never alone!

Don't ignore your temporary cash flow problems!

Like many things in life, ignoring your problems won’t make them go away. The same goes for cash flow problems. Ignoring them can leave you in an even worse position, so tackling them is best.

If you ignore them completely, your creditors will likely react by stopping any products or services they provide to you, which will massively disrupt your business operations.

If you get in your creditors' bad books for not paying, they may act against you via a winding-up petition to gain back any monies owed. A result of this could be Compulsory Liquidation.

You want to avoid this happening because it could mean that your future credit options are affected negatively, you may be seen as unreliable, and your reputation as a director or business owner could be damaged permanently.

Avoiding Compulsory Liquidation...

To avoid Compulsory Liquidation, you may opt into a Company Voluntary Arrangement (CVA). With a CVA, you can keep your business operational while negotiating arrangements to pay back your creditors.

You can request extended payment terms through these negotiations and even apply for debts written off.

If you’re concerned about your cash flow, contact Fortis today for free initial advice.

All conversations are strictly confidential. We’re here to remove your stress and find solutions that work for you! Call us on 0161 694 9955 or email us at [email protected].

My company is experiencing cash flow problems – what can I do?

With the current cost of living crisis and economic recession, it’s very easy for businesses to be experiencing cash flow problems. When you have more money going out than coming in, this can cause stress and worry for business owners, so what can you do in this situation?

Assess your situation...

First and foremost, properly assess your cash flow situation. Is this a temporary problem or one you think can’t be resolved?

What has caused the cash flow problems? Have there been changes to the business? Is it the effects of increasing bills and inflation? Have your sales reduced, and if so, why?

Are your cash flow problems temporary?

If you’ve assessed your situation thoroughly and find that it’s only a temporary problem, then you may be able to delay some of your payments to your creditors. It can be worthwhile speaking with them to explain your situation and negotiate a delay on payments or different payment terms until your cash flow is back on its feet.

Many creditors would understand this situation, especially if you’re on good terms with them and have made prompt payments up until now.

You should be aware, however, that some creditors may not take this news lightly and may see it as a bad sign that you won’t be able to pay at all. They may restrict your services or reduce credit terms.

If you’re concerned about what to do, speak to the team at Fortis, who will be able to advise you on the best action to take.

A number of successful businesses are faced with pressure from HMRC. It could be that you are behind with your VAT, PAYE or Corporation Tax payments to HMRC or you are unable to discharge liabilities in full. In most circumstances, these will be indicators to HMRC that your business could potentially be insolvent.

Any arrears to HMRC need to be dealt with immediately otherwise late or delayed payments can alert HMRC to outstanding debts and prompt them to issue a winding-up petition against your company. It is possible to speak to HMRC to discuss a Time To Pay arrangement (TTP) provided you have a sustainable cash flow and can make payments on time to discharge the arrears.

Speak with Fortis today if you are struggling with HMRC payments - we will be able to advise you on the best solutions over a free, confidential discussion. Call us on 0161 694 9955 or email us at [email protected].