Frequently asked questions
Straight answers when the next step is unclear.
These answers provide general information for company directors. They do not replace advice based on the company’s current financial position, deadlines and records.
Immediate concerns
Can I continue trading if the company cannot pay every debt?
The board should consider cash flow, creditor impact, reasonable prospects and the quality of the information available. Continuing without a reasonable basis can increase risk, so the position should be reviewed promptly.
What should I do if the company has received a statutory demand or winding-up petition?
Keep the document and all related correspondence, record the relevant dates and seek advice immediately. A petition can affect banking, trading and the available options.
Do I need complete accounts before I ask for advice?
No. A short initial conversation can begin with the issues, deadlines and information currently available. Reliable financial information will become important when assessing any formal route.
Directors and personal exposure
Will I be personally liable for company debts?
Company debts are normally separate from directors' personal liabilities. Personal guarantees, an overdrawn director's loan account and particular conduct or transactions can create separate exposure.
Can I be a director of another company after liquidation?
Liquidation does not automatically prevent this. However, restrictions on prohibited company names and any disqualification issues must be observed.
Can I use personal money to support the company?
A director may choose to provide funding, but the terms, affordability and effect on other creditors should be considered and documented. Advice should be taken before making significant payments.
Processes and next steps
Does taking insolvency advice mean the company must close?
No. The purpose of early advice is to identify the realistic options, which may include restructuring, refinancing, a sale, administration, a CVA or orderly closure.
How long does a CVL, CVA, administration or MVL take?
The timetable depends on the company, available information, creditor position, assets, tax matters and the chosen process. A more reliable timetable can be discussed once the facts are known.
How are fees discussed?
The likely work, funding and fees are explained once the circumstances are understood, before any formal instruction is accepted.
What happens to employees?
The position depends on whether trading continues, a sale is being explored and the process used. Where employment ends, eligible employees may be able to make statutory claims, subject to the applicable requirements and limits.
Need more detail?
Read practical guidance on the specific issue.
Our guidance centre covers HMRC arrears, continuing to trade, personal exposure, employees, winding-up petitions and restructuring options.
A useful first step
Check your options before deciding on a route.
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.