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How to liquidate your leisure and hospitality business

If you operate in the hospitality and leisure industry, you’ll know that when the economy hits a downturn and people have less money in their pockets, your business is one of the first to suffer. For many businesses, sales have still not returned to pre-Covid levels while costs have spiralled, and those diminishing profit margins are causing failures in the industry to rise at an alarming rate.  

If your hospitality and leisure business is struggling, it can feel like a desperate situation, but you do have options. As a team of licensed Insolvency Practitioners, we can provide urgent advice on the company rescue options available. And if your business is no longer viable, we can help you close it in the most efficient way. 

Why are leisure and hospitality businesses struggling?

Myriad difficulties are currently affecting the industry and putting the squeeze on businesses. Bills have risen dramatically, driven by large increases in the cost of energy. The cost of food has also soared, forcing businesses to cut down on the size of their menus, reduce the quality of their offering or put their prices up. 

The cost of living crisis means customers are reducing their leisure and entertainment spending and are sensitive to price rises. Business rates are also on the up, as are commercial rents and the cost of hiring staff. That all adds up to an extremely challenging landscape.

If your leisure and hospitality business is struggling, help is out there. By seeking professional insolvency advice at the first sign of a problem, you will give your business the best chance of making a recovery. Liquidation is also an option if your company is no longer financially viable. 

Liquidation advice for leisure and hospitality businesses

If you’re struggling to pay your debts on time, are being chased for payments by creditors or are even facing legal action, you must act now. At UK Liquidators, we offer free initial advice to help you understand your options.

If your business is failing and has no prospect of a recovery, it’s in everyone’s best interests to close it down. If you continue trading and incur further debts you cannot pay, you’re at risk of wrongful trading, which could lead to you becoming personally liable for company debts

Closing the business voluntarily via a Creditors’ Voluntary Liquidation (CVL) puts you back in control. Acting as the liquidator, an Insolvency Practitioner will value and sell the company’s assets and repay your creditors from the proceeds. Any debts the company cannot repay in full will be written off. The business will then be struck off the Companies House register and will cease to exist.  

Liquidation is always the last resort, but there are benefits to this approach. As a company director, you may be eligible to claim redundancy pay, which averages around £10,000. That will give you some financial security while you consider your next move.      

Rescuing leisure and hospitality businesses

Even if your business is insolvent and can no longer pay its debts, liquidation is not a foregone conclusion. Once we understand your financial situation, there are several options that we can explore. 

If you’ve been refused credit through the usual funding streams, we can consider alternative finance options that could provide a quick cash injection. Alternatively, we can help you reach a formal debt repayment agreement with your creditors called a Company Voluntary Arrangement (CVA). It allows you to repay your debts via a single monthly payment over three to five years. 

Company Administration could also be an option. That would allow you to restructure the business and continue to operate without the unprofitable elements that are contributing to your decline.  

Get free initial advice

We understand that this is a stressful time and worrying time, but you don’t need to go through it alone. We are on hand to provide a free, same-day consultation to help you understand your options. We will discuss your situation with you at length and guide you on the best route forward. Contact our team today or arrange a meeting at one of our local offices throughout the UK.

Jonathan Munnery
Insolvency & Restructuring Expert

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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Are you eligible to claim Director Redundancy?
As a Limited Company Director you may be entitled to claim Director Redundancy - Average UK claim is £9,000*.
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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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