The national coronavirus lockdowns and vaccination rollout have been extremely effective in protecting the NHS and the nation’s health overall, but there's no hiding from the fact that the pandemic has created a financial crisis for thousands of UK businesses.
In June 2021, the Prime Minister announced a four-week delay to the end of coronavirus lockdown restrictions, just as the country was finally on the brink of 'unlocking'. This news is highly damaging for a number of sectors, including hospitality, weddings, events, theatre, and many more. If your business is struggling to survive this elongated lockdown period of zero or reduced trade, it's important to understand the options that might be available to you, and also your obligations as a director.
It's also key to remember that if your business is insolvent, it’s incumbent on you to seek help from a licensed insolvency practitioner (IP). Even if you haven’t yet reached this stage, obtaining professional insolvency advice is crucial.
It’s important to take care if you believe liquidation is inevitable due to the prolonged covid restrictions which end on July 19th 2021, as your priorities change when your company is insolvent. UK Liquidators has extensive experience of helping directors to voluntarily place their companies into liquidation, and can provide the advice you need.
You must prioritise your creditors and minimise their losses, and entering Creditors’ Voluntary Liquidation (CVL) allows you to do so. It also offers you the potential to claim director redundancy.
Redundancy pay can cover the professional fees associated with this process, and/or support your personal financial situation, but you need to have worked as an employee of the company to be eligible.
Directors have a degree of control of the process – you can decide when to enter liquidation, and also choose a liquidator. When you voluntarily place your company into liquidation you’re protecting your creditors from further financial loss, and can reduce the risk of any future wrongful trading allegations.
CVL involves selling company assets for the benefit of creditors, and any remaining debt is written off in most circumstances. There are instances where you could be held personally liable for outstanding debt - these include when personal guarantees have been provided.
When you place your company into liquidation you may be able to claim statutory redundancy pay if you’ve worked as an employee. It isn’t widely known that directors can be eligible in this respect, but director redundancy typically represents a considerable sum.
The eligibility criteria include:
For more information on claiming director redundancy, and for professional guidance if you believe your company cannot survive these prolonged covid restrictions, please contact our expert team. There may be other options open to you that you haven’t considered, and we will clearly present these so you can make an informed decision.
The UK operates a supportive insolvency regime to help eligible businesses recover financially. This includes formal restructuring of debt, for example, and a moratorium on creditor legal action.
UK Liquidators provide reliable advice on these and other appropriate options. We can also let you know if you’re eligible for director redundancy pay, and guide you through the liquidation process. We work from offices around the country, and will arrange a free, same-day consultation to quickly assess your situation.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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