A disrupted supply chain, fewer vehicle sales and the ongoing fallout of Brexit are just a few of the headwinds that have made the automotive industry a challenging place to operate for the last few years.
If you operate in the sector, whether you manufacture component parts or are responsible for vehicle sales, rentals or repairs, and your business is struggling, help is out there. You should seek urgent advice from a licensed insolvency practitioner to discuss your business rescue and liquidation options.
Ongoing supply chain shortages, higher vehicle prices, heightened inflation and rising interest rates are all factors that have led to a slowdown in the automotive industry. Throw in the years of uncertainty caused by Brexit and an ongoing skills shortage and it’s no surprise that automotive businesses of all sizes are struggling.
If you’re feeling the effects of the downturn and are unsure what to do next, seeking early professional insolvency advice is crucial. Liquidation could be in everyone’s best interests if your automotive business is no longer viable. Alternatively, there are rescue options to keep you trading if your business is struggling but could be profitable again in the future.
This can be a confusing and stressful time, which is why it’s so important that you have the full facts before deciding on your next steps. At UK Liquidators, we provide reliable and professional advice to clarify your financial position and help you understand your options.
Although liquidation is the last thing you may want for your business, it might be the most appropriate route to take if your automotive business is insolvent and there is no reasonable prospect of being able to turn the situation around.
A Creditors’ Voluntary Liquidation (CVL) will enable you to close your business in line with insolvency laws and repay your creditors as far as possible. Any remaining debts will be written off so you can move on to something new.
As well as enabling your eligible staff to claim redundancy pay, entering into a CVL can allow you to make a director’s redundancy claim. That can provide a financial lifeline and buy you some time while you consider your next move.
With a Creditors’ Voluntary Liquidation, you decide when to place your company into liquidation and choose which insolvency practitioner acts as the liquidator. By putting the company into liquidation voluntarily, you also reduce the risk of any adverse repercussions, such as being made personally liable for the company’s debts.
Once appointed, the liquidator will value and sell the company’s assets and distribute the proceeds to your creditors before closing the business. The sale of assets will typically cover the liquidator’s fee. However, if the value of your assets is insufficient, this is where a director’s redundancy payment can be very useful.
Although liquidation might be an option for your business, it may not be the only one. Once we understand your circumstances, we will be able to advise you of the rescue and recovery procedures that might be appropriate.
For example, if your business model is viable but you’re struggling to repay your debts, we might recommend a Company Voluntary Arrangement (CVA). This formal insolvency process will allow you to repay your debts over time while continuing to trade. Alternatively, entering into Company Administration can protect you from creditor legal action while we restructure the business so it can continue as a going concern.
We provide reliable and trustworthy company rescue and liquidation advice for your automotive business. Call today for a free consultation with our partner-led team or arrange a meeting at one of our network of offices throughout the UK.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
Take our 60 second test and find out
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.
Looking for immediate support?
Complete the below to get in touch