Establish the cash position
Prepare a short-term cash flow showing essential receipts, wages, tax, suppliers, rent and finance commitments.
Advice for company directors
Financial pressure requires an informed board response.
Directors do not need to diagnose insolvency alone. The immediate priority is reliable information, protection of company value and decisions that can be explained and supported.
Immediate priorities
What the board should address now.
These actions help create a reliable picture of the company and protect the quality of later decisions.
Protect records and assets
Preserve accounting records, correspondence, contracts, payroll information and control over company property.
Review new commitments
Consider whether orders, credit and expenditure can be fulfilled without worsening the position for creditors.
Document board decisions
Record the information considered, professional advice obtained and reasons for material decisions.
Avoid unusual payments
Connected-party payments, asset transfers and preferences require careful scrutiny.
Take advice early
Options tend to reduce after enforcement, a petition or loss of stakeholder support.
Director duties
Creditor interests become increasingly important as financial distress deepens.
Where directors know or ought to know that the company is insolvent or bordering on insolvency, or that insolvent liquidation or administration is probable, creditor interests must be considered. If an insolvent liquidation or administration becomes inevitable, creditors' interests become paramount. Directors should avoid worsening losses, preserve company assets and maintain adequate records. Taking advice does not predetermine closure. It helps the board understand and evidence the basis for its decisions.
Personal concerns
Company distress often creates questions for directors personally.
Personal guarantees
Guarantees should be identified and reviewed for scope, amount, security and enforcement triggers.
Read moreDirector's loan accounts
An overdrawn balance may be repayable to the company and pursued in an insolvency process.
Read moreDirector disqualification
Disqualification is not automatic, but a liquidator has statutory reporting duties concerning conduct.
Read moreStarting another company
Restrictions can apply to the reuse of a prohibited company name and must be considered before action is taken.
Read moreA disciplined review
How we help the board reach a decision.
- 01
Understand the immediate pressure
Identify deadlines, cash requirements, creditor action and operational risks.
- 02
Review financial information
Assess cash flow, assets, liabilities, funding, profitability and stakeholder positions.
- 03
Compare outcomes
Test rescue, restructuring, sale and closure routes against the likely creditor outcome.
- 04
Document and implement
Explain the recommendation, record the basis for the decision and coordinate the next steps.
A useful first step
Understand the position before options narrow.
Answer a small number of questions about the pressure facing the company. The initial discussion is free and without obligation. Fees for any formal work are explained before an instruction is accepted.