The construction industry is facing a raft of headwinds that are pushing firms into critical levels of financial distress and taking their toll on the embattled sector.
If you are worried about the financial health of your construction business, you should seek urgent liquidation and company rescue advice from a licensed insolvency practitioner. They will be able to assess your financial position and provide professional guidance about the best way forward.
Several challenges are making life difficult for construction firms and smaller businesses, particularly, are feeling the strain. Inflation and rising interest rates are driving up the cost of materials and borrowing, while supply chain issues and staffing shortages are causing high levels of uncertainty.
There’s also a bad debt problem in the construction industry, with around £300 million of unpaid invoices, which could rise to £1 billion by the end of the year. With construction companies living and dying on their cash flow, bad debts and late payments can quickly push businesses into crisis.
If your construction business is struggling, seeking professional advice early will give you the greatest chance of recovery. Restructuring your debt or streamlining and simplifying the business could allow you to continue to trade. Alternatively, if the business is no longer viable, liquidation is likely to be the best course of action.
No company director will welcome the prospect of closing a business they have worked so hard to grow, but in certain circumstances, voluntary liquidation is the right option.
A Creditors’ Voluntary Liquidation (CVL) will bring your business to an end in line with the relevant insolvency laws. It will also help to protect you from the potentially serious repercussions of continuing to trade an insolvent business that subsequently fails.
At UK Liquidators, we will assess your financial position and present you with the best options. If a CVL is right for your business, we will explain the process to you so you can proceed with confidence.
A Creditors’ Voluntary Liquidation is a formal procedure you instigate as a company director. You decide when to put the company into liquidation and which insolvency practitioner you want to act as the liquidator.
The liquidator will identify and value the company’s assets before selling them at auction to raise money to distribute to your creditors. Any remaining debts will be written off. You will not be personally liable for company debts unless you have signed a personal guarantee or been involved in wrongful trading.
One often overlooked aspect of liquidation is that you could claim company director redundancy pay, which averages around £10,000. You will be eligible if you:
You can use your director’s redundancy pay to meet the cost of the liquidation if your company assets do not cover the liquidator’s fee. It can also help you prepare for the next step in your career.
If your construction company is struggling financially, liquidation may not be your only option. If your business model is still viable, there could be steps you can take to save your company.
Our experienced team of insolvency practitioners will identify rescue and recovery measures that are appropriate. This could include a Company Voluntary Arrangement (CVA), which allows you to continue to trade and repay your creditors over time.
Alternatively, it might be possible to restructure your business via a Company Administration, so you can continue trading without the unprofitable elements of your business that are causing your financial decline.
For trustworthy company rescue and liquidation advice for your construction business, please contact our partner-led team. Call us for a free, same-day phone consultation or arrange a face-to-face consultation at one of our 100+ 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.
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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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