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Administration is a legal process which can be used to rescue a viable business that is insolvent due to cashflow problems.
How does Administration work?
Administration is an insolvency process that can help directors restructure their business. Directors and creditors have the power to place a company into administration and, we can help directors rescue their business, protect jobs, preserve business value, and be free from the stress of unsustainable creditor pressure.
The Administration process is particularly useful when there is serious creditor pressure as the legal framework and status given to a company in Administration instantly takes that pressure away while we work with you to achieve the best outcome.
What is a Company Voluntary Arrangement?
If your limited company is insolvent, it can use a Company Voluntary Arrangement (CVA) to pay creditors over a fixed period.
How does a Company Voluntary Arrangement work?
A CVA is a legally binding contract between a company and its creditors. The CVA document will set out proposals for repayment and usually involves an element of debt forgiveness from creditors, demonstrating that whilst they may not be paid in full, by supporting the CVA, they will get a better return than if the company were put into liquidation.
CVA’s can last up to 5 years and if creditors agree, the limited company can retain control and continue to trade.
What is Pre-pack Administration?
A pre-pack administration is where the sale of a company’s business and assets is arranged before the company enters administration and then completed once the process begins.
How does Pre-pack Administration work?
Pre-pack administrations have received mixed reviews in recent years largely due to an abuse of process. A licensed insolvency practitioner from Rushtons can guide your company through the required protocols, ensuring the pre-pack administration is the right process and can withstand creditor scrutiny.
Pre-pack administrations are particularly useful where there is work in progress to protect, and where there needs to be a seamless continuation of the business. This option provides a quick corporate solution with little disruption to preserve value, protect jobs, and give the best possible return to creditors. This in turn ensures that the business can continue without the burden of creditor liabilities.
What is Time to pay?
An arrangement where a company is granted breathing space and time to pay off debt.
How does time to pay work?
Time-to-pay arrangements, particularly with HMRC, are regularly used by companies and insolvency professionals as an effective way to spread unexpected costs across a more affordable time period. At Rushtons, we have successfully negotiated time-to-pay arrangements for our clients with HMRC, landlords and creditors. If you feel your company would benefit from the breathing space granted by a time-to-pay arrangement, then get in touch to explore how we can assist.