Many businesses are not aware of how their assets could be caught up in someone else’s liquidation or administration. For subcontractors, one of the hidden dangers when dealing with builders is the potential to be hit with a preferential payment demand if the builder enters into liquidation.
Businesses are launched with the best intentions, but even the most astute plans can be undone by changes in the business environment or competitive landscape, consumer tastes, rising costs, or cash flow problems.
Personal insolvency could also have a big impact, as your personal and business obligations are often closely intertwined.
If your business is unable to repay its debts, it could be insolvent. Closing a business can be a complicated and emotional time, but insolvent trading laws means directors should understand their options and make a decision as soon as possible. Seeking advice from insolvency professionals can make the process easier, help you stay fully compliant with the law throughout the process, and help you avoid unwanted surprises.
If your company has incurred outstanding debts, your creditors have the option to serve a statutory demand against you. The statutory demand is a type of debt recovery tool that when served brings consequences for your business.
Companies are a unique type of legal structure in that they are a separate legal entity and…