Running a business always comes with challenges, now even more so during these uncertain times we are all facing. Not only do you need to keep up with the latest Government guidelines but you may also have to think of creative ways to diversify your business if you are in an industry impacted by the pandemic.
In times of crisis it may feel that firefighting is all you can do. The uncertainty of what will happen in the next few months, and even years, makes it difficult to plan for the future but it’s important to plan ahead to avoid problems in the future and the threat of insolvency.
In part one of our companies in crisis Q&A series for company directors, senior litigator Alexander Neale who specialises in insolvency talks you through the practical steps you can take if you are concerned about the cash flow or viability of your business.
Key points
- As company director you should take stock regularly on what you think may or may not happen in the future.
- Regularly create cash-flow forecasts and ensure that the company is not overburdened by debts.
- If you have concerns it’s vital to get advice from an insolvency practitioner as early as possible.
- If you leave it too late you may only have the option to go down the route of a formal insolvency process.
- Part one: I am concerned for the future of my company because of Covid-19. What steps should I take?
- Part two: I have signed personal guarantees to my company’s lenders but what happens if the company then becomes insolvent?
- Part three: How can I tell if my company is insolvent?
- Part four: My company is receiving pressure from creditors but it can’t afford to pay what it owes. I think that my company is now insolvent, what options do I have?
- Part five: Should my company continue to trade if I know that it has no way of paying all its debts?
- Part six: If my company is placed into an insolvency process, how will this affect me?
- Part seven: What duties do I owe as a company director and do my duties change if the company becomes insolvent?
- Part eight: My company is due monies from several customers. What steps can I take?
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
