Property businesses have experienced unparalleled challenges due to the effects of Covid-19 on tenants and overall property demand. In this era where nothing in business is certain, and bespoke measures such as the ban on lease forfeiture effectively tie your hands as a landlord, property business liquidation advice is crucial.
If you run a property business and you fear liquidation may be your only option, it’s vital to seek professional insolvency help. You may discover that your business can be rescued and that there’s potential for it to continue in trade, albeit within a changed operational structure, or even that the business could be sold.
Insolvency is an extremely serious situation that needs to be carefully managed. Although liquidation would ultimately mean the end for your business, by securing reliable advice you gain peace of mind that the steps taken are the most appropriate.
The original ban on lease forfeiture was introduced as a short-term solution to widespread financial decline among individual and commercial tenants, and has safeguarded those tenants to great effect.
The legislation has created extreme financial pressure for landlords, however, who for almost a year have had to continue meeting their liabilities with no incoming rents. Property management companies have also seen a steep decline due to Covid-19.
Demand for commercial property, in particular, has considerably reduced as large numbers of people work from home, leaving the property business sector as a whole struggling to survive.
So what are the potential outcomes if you run a property business and fear that it may be liquidated? Here are a few possible routes away from liquidation that might be appropriate for your business, and some reliable property business liquidation advice.
The Creditors’ Voluntary Liquidation (CVL) process enables directors to take the initiative and place their company into liquidation. Not only does this protect creditor interests, as is required by law, but it can also enable directors to claim statutory redundancy pay.
If you’ve worked as an employee for your company as well as being a director, you may be able to claim redundancy and other statutory entitlements, and we can provide further tailored advice on your eligibility.
The CVL process itself involves selling all company assets and distributing the proceeds amongst creditors in the statutory order. As a property business, any assets secured against borrowing will be repossessed by the lender so they can recoup their money.
When all debts are repaid as far as funds allow, the company is removed from the register at Companies House and ceases to exist. But could any alternatives to liquidation lead the company to better times? What could you do to save your property business from liquidation?
Informal measures, such as restructuring the company so that it benefits from additional cash flow, can improve your trading situation and allow the business to continue. This might involve using property assets to generate funding, for example, or selling off/ceasing loss-making areas of the business.
Formal insolvency measures may also be suitable, and these can include Company Voluntary Arrangements. CVAs restructure your debts so that the company makes a single monthly repayment, distributed in the agreed proportion laid out in the arrangement.
Company administration is another route than might help you avoid liquidation. It provides an eight-week ‘breathing space’ where creditors cannot begin or continue any legal action against the company.
UK Liquidators will provide the trustworthy property business liquidation advice you need. We have extensive experience of helping business owners to voluntarily place their company into liquidation, and can also advise on claiming director redundancy. Please contact one of our partner-led team to arrange a free, same-day consultation – we operate a broad network of offices throughout 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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