If you are interested in business administration and you would like to know if your company should go into this, please complete the contact form now and speak to our experts.
Our team can talk you through the differences of voluntary administration and CVA. If you would like to find out more, make sure to speak to our team now.
There are various advantages and disadvantages to administration and it is important to make sure you are aware of these before you go into this.
If you are wondering if business administration is right for you, we can help. When a company is close to, or actually enters, administration, it’s hard on everyone involved.
If a buyer can’t be found to take over the business then the human factor can be devastating. Not only will there be a lot of redundancies involved, but it has an effect on the surrounding areas and other nearby trade as well.
If your organisation is looking at these types of proceedings, what should you expect to happen? Can it actually be a positive thing? And perhaps most importantly, is there any way to stop it happening altogether?
You may think about a wind up petition https://www.businessdebts.org.uk/winding-up/ or you may just want some help through administration. Whatever you need, we can help.
If you think that your business is going to go into administration because you have more debts than you can afford to realistically pay back, what can you do to try and salvage it?
There are several different options available but it depends on the severity of the situation the firm is in.
It doesn’t automatically mean that the organisation will close its doors for good. If mismanagement of the business is what has led to the administration team being called, in then this can actually be a positive thing for the company.
The administrators can remove the weak elements and breathe new life back into the firm.
The term is heard often enough but most people don’t actually know what happens when a company goes into administration. If a company is turned over to the administrators this means that full control of the firm is relinquished to them so that they can try to find a way to rescue it.
The administrators (also known as Insolvency Practitioners) will act in the best interests of the organisation and this will include looking at why the business is failing in the first place. The Insolvency Practitioners then have 8 weeks to come up with a plan for how they intend to rescue the organisation.
While the organisation is in administration it cannot be touched by the people that it owes money to.
The Insolvency Practitioners will look at whether they think the organisation is still financially viable enough to continue trading. They can suggest selling the entire business or just a part of it to re-balance the books.
Ultimately though, if a buyer can’t be found and a solid source of funding is not forthcoming then the business will go into liquidation - https://www.businessdebts.org.uk/cvl/. This usually means selling off any remaining assets, including fixtures and fittings, to pay the creditors what they can.
Voluntary administration in the UK is more commonly known as a CVA, or Company Voluntary Arrangement. What this means is that the Directors of the company can vote to pay off the outstanding debts over a fixed period of time.
In order for this to be granted, at least 75% of the creditors must agree to it. If this number is not reached then the firm can still face voluntary liquidation instead.
If your company is facing the prospect of becoming defunct then you might need to make the difficult decision to choose between a CVA or administration in order to ensure its survival. Although both are voluntary there are differences between the two.
A CVA is undertaken when the Directors of a firm vote to try and pay their creditors over an agreed length of time and continue trading. Business administration places control of the business into the hands of the Insolvency Practitioner and their team and hope that they can find a resolution before the firm has to enter liquidation.
Neither option is particularly enjoyable but in all honesty, the alternative isn’t much better either.
It can be even more stressful when you have HMRC debts https://www.businessdebts.org.uk/hmrc-debt/ and our team will make certain you receive the best advice.
Whether you run a local business or something substantially bigger, a CVA can give your firm the space that it needs to pay off the creditors and keep trading. A Company Voluntary Arrangement can be explained like this;
‘The Board of Directors take a vote on whether to enter a CVA or not. Once it has been agreed to apply for a CVA, the Board will enlist the help of an Insolvency Practitioner, who will write to the creditors with a payment proposal and ask them to vote on whether it is acceptable to them or not.
If 75% of the creditors agree to the terms then the Company Voluntary Arrangement can be put into place. Once it has been approved then the organisation will make regular payments through the Insolvency Practitioner to the creditors until the debt has been cleared.’
There are various advantages and disadvantages of administration including;
If your business is facing administration and you want a resolution, contact us now (https://www.businessdebts.org.uk/) for the most professional advice and conduct around. We may not be the closest to you, and maybe you’ve searched for ‘help with business administration near me’ and come up empty-handed, but we are what you’re looking for.
Businessdebts.org.uk will aim to save your company, your employee’s jobs, and many years of hard work that have gone into your company. We are confident that we can find a solution with your help.