Business in Trouble?
HERE TO HELP
As a Director of a Company, you have a duty to run the business correctly. If insolvency is likely then as a director, you have a legal obligation to act in the best interest of the creditors of the company.
How do you determine whether your business is in trouble? There are a couple of questions that you can ask yourself:
1. Can the business pay its debts as and when they fall due?
2. Does the company owe more than the assets that it has (Book Insolvent)
3. Has a Court Judgment been issued against you or the Company?
Speed is of the essence
To avoid any risk of unlawful or wrongful trading, seek advice immediately.
Despite popular belief, insolvency does not necessarily mean the end of your business. However, ignoring the warning signs of insolvency may reduce any chance of getting the company back on its feet. Detecting and acknowledging that the business has financial problems is the first step. Acting quickly should give you a fighting chance of ensuring that it has a viable future.
Bounce Back Loans - The Sting in the Tail!
We are starting to see the abuse of Bounce Back Loans reflected in the Insolvency Process.
Those that had the funds into the company account one day only to be transferred to their personal bank account soon after. They forget that the bank, who actually lent the money have the ability to see exactly where the funds went.
New regulations coming in give the Official Receiver the power to investigate companies that have elected to go the DS01 route to dissolve the company. There are already reports of Fraud and these are the things that are being looked at under the microscope:
• Transfer of funds to Personal Account either immediate or systematic removal
• Company dormant; filing dormant accounts for the qualifying period 2019 or 2020
• Multiple applications to different lenders; BBL’s CBiLS of Business Recovery Loans.
• Minimal creditors; Bank O/D, BBL, CBiLS and HMRC
• Funds not being used for the benefit of the business
• Clear intention NOT to repay the loan or carry on trading
• Businesses that have overstated their turnover for the purpose of obtaining the loan
• Failure to disclose BBL in the Statement of Affairs
• Business not trading as at 1st March 2020
• Business not trading in the UK or resident for Tax purposes
• Company insolvent prior to the application
• Including application close to an insolvency event of post-petition
• Sole Traders who were Bankrupt or subject to DRO or IVA.
If any of the above sounds familiar then you need good advice, it cannot be swept under the carpet.
Indeed, the failed loans will ultimately be repaid by the Tax payer!
We offer a FREE 30 Minute telephone consultation to discuss your matter and advise you on a sound course of action.
Contact us today to arrange yours.