Shortage of government guidance is said to have caused the cancellation of Kendal Calling, the popular live music event in Cumbria. The current crisis is taking a heavy toll on the festival and live music industry in general, which has suffered devastating financial loss since the start of the pandemic.
Government imposed restrictions have left live music companies and festival related businesses unable to take action to improve their situation, and at increasing risk of liquidation.
UK Liquidators can provide the independent professional advice you need if your live music or festival business is experiencing severe financial difficulty.
So what are some of the issues you’re facing in this sector, and what options might be available?
Although the Events Research Programme enables some live events companies to confidently plan, not all are chosen to take part in the ‘test events’ initiative. Compounded by a delay in publishing the results of the Events Research Programme, a fragile existence continues for festival and live music companies.
Lack of a government backed insurance scheme for cancelled events is leaving businesses facing ongoing losses, both in terms of new income, but also for the outlay required before an event takes place.
If it’s not possible to rescue your business, it’s important to know how liquidation works and the potential issues you face as a company director. Creditors’ Voluntary Liquidation, or CVL, is a formal process that must be administered by licensed insolvency practitioners (IPs).
Entering liquidation voluntarily allows you to fulfil your legal obligations as a company director, and also offers further benefits. You can make your own choice of liquidator and time the liquidation, but a key factor is that you may become eligible for director redundancy.
Liquidation means your business’ affairs are wound down by the IP, and the company name is struck off the register at Companies House. All business assets are sold at a liquidation auction, and the proceeds used to repay your creditors.
As the company is insolvent, not all creditors will receive a return from the process, and it’s rare for unsecured creditors to benefit from the sale of assets. Any debts remaining at the end of the process is written off.
Prioritising your creditors’ interests is paramount if your business enters insolvency. If you fail to do this, you could be at risk of misconduct or wrongful trading allegations following the liquidator’s investigations.
If you wait to be forcibly liquidated by a creditor, for example, you may have increased the financial losses for creditors as a whole, and this goes against the rigid laws of insolvency in the UK.
You could face disqualification for up to 15 years, or even personal liability for the additional debts incurred by your creditors. Entering liquidation voluntarily allows you to prioritise your creditors, and as we mentioned earlier, could make you eligible for director redundancy pay.
If you’ve worked under a contract of employment for the company for at least two years, and take a regular salary through PAYE, you might be able to make a claim for director redundancy.
UK Liquidators can let you know if you’re eligible in this respect, and offer further liquidation advice tailored to your own festival or live music company. We offer free, same-day consultations, and work from a network of offices around the country.
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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