Reviewed 18th February 2020
Scotland Debt Solutions has extensive experience of company administration. We can offer trustworthy advice on whether it’s an appropriate option, and the potential implications for your company and yourself as a director.
Company administration helps limited companies deal with serious debt and the associated creditor pressure that prevents them moving forward. It’s an option for business recovery, and can offer a company the best chance of escaping debt through restructuring or a sale of the underlying business.
Pre pack administration is a specific procedure that involves selling business assets to a connected or unconnected party, and is sometimes suitable for companies in severe debt but where the underlying business is viable.
If your company is insolvent but it’s believed that it can recover, administration may be an appropriate solution. The process is typically open to businesses with significant assets, which are experiencing specific issues that have compromised their financial position.
The aim of administration is to achieve on of the following three statutory purposes:
We can let you know if your company is eligible to enter administration, and provide tailored advice on the process where appropriate.
Once the company enters administration a moratorium period of eight weeks begins. This allows the administrator to assess the company’s position and make a plan for the future without fear of creditor legal action.
During this period creditors cannot present a winding-up petition, or harass directors with regard to repayment of their debt. The administrator submits a written proposal to creditors along with a statement of the company’s financial affairs. If accepted, the initial period of administration can end in a number of ways.
Companies can exit administration in various ways, including:
We specialise in helping Scottish companies to escape debt, focusing on business rescue and recovery. We’ll help you negotiate with HMRC and other creditors where necessary, and put forward new plans for repayment.
Scotland Debt Solutions has a network of offices around Scotland, and offers same-day consultations. This allows us to quickly assess your best options when your creditors are pressurising you, and move forward with positivity.
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A Company Voluntary Arrangement (CVA) can help a company to escape debt by negotiating a formal payment plan with creditors allowing for reduced monthly repayments. Directors retain full control of their company during a CVA and the business is allowed to continue trading throughout.
When a limited company becomes insolvent, it’s important for directors to place the interests of creditors first and do all they can to minimise further losses. Creditors’ Voluntary Liquidation (CVL) is an insolvency process that allows this to happen, and ensures directors comply with strict insolvency laws.
Members’ Voluntary Liquidation (MVL) allows you to close your business and extract the profits in a tax-efficient way. It’s a process that’s available to solvent limited companies, and requires you to make an official Declaration of Solvency prior to commencement.
A director’s loan account (DLA) can become overdrawn if too much money is taken from the company that isn’t salary or a dividend. Directors’ Loan Accounts are useful when operated with caution, but can be a cause of concern if the company becomes insolvent.
A Winding-up Petition is a legal notice presented to the court by a creditor with a view to forcing a company into liquidation. If a winding-up order is granted by the court, compulsory liquidation can take place very quickly, and this signals the end of the company.