Corporate insolvency
What is Corporate Insolvency?
A company is deemed insolvent if it is incapable of settling its debts as they fall due. Corporate insolvency is an intricate matter that necessitates the assistance of a corporate insolvency solicitor. The corporate insolvency solicitors at Arlingsworth will collaboratively elucidate your alternatives and lead you through the diverse “rescue” mechanisms and procedures that might enable the survival of an insolvent company. Our focus throughout is on pragmatic and commercial advice designed to help you meet your objectives.
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Common warning signs include cash flow problems, mounting debts, late payments to suppliers, legal notices from creditors, and difficulty securing financing. Identifying these issues early allows businesses to consider rescue mechanisms before insolvency worsens.
The main corporate insolvency procedures include:
- Company Voluntary Arrangement (CVA): A negotiated debt repayment plan with creditors.
- Administration: A temporary protective measure to restructure or sell the company.
- Liquidation (Voluntary or Compulsory): Winding up the company and distributing assets to creditors.
- Receivership: Control of assets transferred to a receiver, usually for secured creditors.
Directors must act in the best interests of creditors, avoid wrongful trading, maintain financial records, and seek professional advice if insolvency is suspected. Failure to comply could lead to personal liability or director disqualification.
Generally, directors are not personally liable, but they can be if they sign personal guarantees, engage in fraudulent trading, or breach legal duties. Seeking early legal guidance can help mitigate personal financial risks.
Liquidation leads to the sale of company assets, termination of business operations, and potential investigations into director conduct. In cases of misconduct, directors may face fines, bans, or legal action.
Yes, businesses can consider negotiating informal creditor agreements, refinancing, securing new investment, or selling assets. Seeking legal advice early maximises the chances of finding viable alternatives.
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Get in touch with our experts
Contact our Corporate Insolvency experts in Brighton or London today to get assistance with your situation. We are an experienced team, and have worked with a wide range of companies across a multitude of sectors – both private businesses and international brands. We pride ourselves on our absolute service and are always available to speak to, 7 days a week.