What happens to a Personal Guarantee in bankruptcy?
Are personal guarantees enforceable if you have been declared bankrupt? Personal guarantee motivates banks and other lenders to approve business loans, as it lessens their risk of losing money. If the company defaults, the lender can pursue one or more directors for payment. When offering a personal guarantee, it establishes a secondary responsibility, potentially exposing […]
Bank Account Freezing Orders: Advice for company directors
How will a freezing order affect access to company finances and assets? A freezing order stops access to a company’s money and assets equal to the debt owed to a creditor. It can also be used to prevent higher authorities from disposing of assets. If creditors think a company’s money is in danger, they can […]
Understanding Directors’ Personal Guarantees and Liquidation
What is a personal guarantee? A personal assurance is a security arrangement provided by a director of a limited company to secure company loans. Although the business is accountable for monthly repayments of the loan or finance agreement, if the company struggles to meet these obligations and goes into liquidation, the duty to repay the […]
What Is a County Court Judgment (CCJ) Against a Company?
What is a company County Court Judgment (CCJ)? A County Court Judgment, known as a CCJ, is a court order issued to an individual or a company due to non-payment of debt. For a company, this might mark the initial move towards compulsory liquidation if the outstanding debt is not promptly addressed. How Does […]
What is a Transaction at an Undervalue?
What does the Insolvency Act say about Transactions at Undervalue? A transaction at an undervalue occurs when you sell or transfer a company asset for no cost or a price below market value, leading to insolvency or exacerbating existing insolvency. Understanding Transactions at Undervalue: Investigation Process If your company is facing financial difficulties and […]
What Are The Risks Associated with an Informal Company Arrangement?
Are Informal Company Creditors Arrangements Worth Your Time? An informal insolvency arrangement involves direct negotiation with creditors to reach an agreement on repaying owed money. It can be relatively simple if your creditor cooperates, but it won’t be legally binding. When creditor pressures and mounting debt become overwhelming, seeking a solution promptly is crucial to […]
How Does Company Insolvency Affect Preference Shares?
Preference shares and how are these important in company insolvency In a limited company, there are two primary types of shareholders: ordinary shareholders and preference shareholders. Ordinary shareholders receive “common” stock, while preference shareholders are issued “preferred” stock. Preference shares are typically prevalent in larger companies, especially those that have secured external investments. Distinctions […]
Insolvency and perishable goods – why you need to move fast
The importance of moving quickly to realise the value of perishable goods If your business faces insolvency, liquidation might be unavoidable if no other options exist. This involves closing the business after selling all its assets. Preserving the value of perishable goods is crucial when they contribute to the company’s worth. Whether a creditor pushes […]
Understand the rights of bailiffs and what they can take
What can a bailiff take from my home or workplace? Bailiffs have the authority to seize assets from your workplace to satisfy the debt being recovered. For limited company directors, they can only take property from the business premises that belongs to the company. However, if you are a sole trader, business debts are treated […]
Selling an insolvent business: What are your options?
Is it possible to sell an insolvent or distressed business? If your business is in financial distress or already insolvent, selling it may seem daunting, but it’s a common practice. Various parties, including turnaround specialists and entrepreneurs seeking struggling businesses, often purchase insolvent or distressed businesses. So, if your business is on the brink of […]