Insolvency worries? Take professional advice early

By Farleys Solicitors LLP

23 Mar 2020

mark-hague.jpg

Many businesses are set to suffer due to the impact of social distancing and self-isolation, with industries such as travel, retail and insurance being some of the hardest hit.

The effects of the coronavirus on businesses will likely see those already struggling pushed into greater financial difficulties, and in the worst case scenarios, insolvency.

With the disruption comes a myriad of questions and worries for business owners about what they can do in such unprecedented times – and how to ensure that any problems stay short term and don’t stretch into the future.

Our advice at present is the same as always – take early advice.  Please talk to your solicitor, your accountant, banks/lenders and your usual professional advisors.  By recognising the early signs and seeking advice, a company has a chance to put an action plan in place to minimise the adverse consequences of the current climate.

For most businesses the main impact will be operational due to the Government’s advice on self-isolation, therefore many business owners/senior management are now, if not already, considering what measures they can put in place to maintain ‘business as usual’ and financial viability, but whilst the health and safety of employees is paramount, senior management must also be mindful to ensure the health of the business.

Essentially, a director has duties to act in the best interests of the company, and also in the best interests of creditors in times of financial distress.

Should a business fail for any reason, let alone restrictions caused by coronavirus, as a business owner or director there are things you can do to protect yourself from subsequent insolvency claims

Do not panic. There are lots of pro-active steps you can take to minimise the impact on your business.

Take advice early. If you are in any doubt about the viability of your business now or in the future, speak to your trusted professional advisors about what to do next.

Talk to your key staff, suppliers and creditors about the situation. Most will understand and be in a similar situation themselves.

If insolvency is the way to go, be mindful of potentially creating personal liability for the directors by paying certain creditors (including yourself) over others and/or misusing the Company’s limited funds in time of crisis. Funds should be preserved for the benefit of all creditors!

Talking to an insolvency practitioner does not mean the business will end up in an insolvency process. First and foremost an insolvency practitioner will try and save a business. We work with insolvency practitioners all over the country so can put you in touch with the right person for you and your business, depending on its size and its sector, and we will work alongside you to ensure the best solution is achieved.

In these unprecedented times, balancing employee health and business health will be very challenging. For any clients experiencing financial issues due to the coronavirus, we are here to help, advise and can signpost you to the best support.  Please contact us on 0845 287 0939 during office hours or 07515 930 374 anytime or via email to [email protected]

Latest news

1

fulfilmentcrowd reports record-breaking performance LeeThompsonfulfilmentcrowd

fulfilmentcrowd reports record-breaking performance

20 Dec 2024

2

Record year for Grant Thornton Northern deals team The team

Record year for Grant Thornton Northern deals team

20 Dec 2024

3

New partner among family team hires as Brabners strengthens personal offer Cara Nuttall Chris Fairhurst And Hannah Saxe

New partner among family team hires as Brabners strengthens personal offer

20 Dec 2024

4

Amazing Accrington bring in almost £400k in funding to Hyndburn Clayton Boxing Club press.jpg.jpg

Amazing Accrington bring in almost £400k in funding to Hyndburn

19 Dec 2024

5

BAE Systems solar powered aircraft achieves new stratospheric success The flight

BAE Systems solar powered aircraft achieves new stratospheric success

19 Dec 2024

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
The Lancashire Festival of Business
FOB 315
Exhibitions
30 Jan 2025

The Lancashire Festival of Business

Impact Conferencing, Burnley, BB12 6QP

09:30 - 16:00

Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

Preston Tech Connection - January Meet-Up
Nov Preston Tech Connection event banner-4.png.png
LBV Hub Networking
15 Jan 2025 - 15 Jan 2025

Preston Tech Connection - January Meet-Up

Society1 Coworking Space, Preston, PR1 3LT

18:00 - 19:30

R.I.S.E. and Shine
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
16 Jan 2025 - 16 Jan 2025

R.I.S.E. and Shine

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

08:45 - 11:00

The Business Network Central & East Lancashire
LBV Hub Networking
16 Jan 2025 - 16 Jan 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

LBV120 Magazine Launch Event
DSC9389
Networking
17 Jan 2025

LBV120 Magazine Launch Event

Lancastrian Suite, Town Hall, Chorley, PR7 1DP

08:30 - 10:30

Red Rose Awards 2025
Red Rose Awards 2025
Awards
13 Mar 2025

Red Rose Awards 2025

Winter Gardens Blackpool

18:00 - 11:59

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV118 Online Graphic
Subscribe now

Weekly news bulletin