For businesses facing certain financial difficulties, it can be invaluable to seek the advice of an insolvency practitioner. Not only do they specialise in getting businesses through particularly challenging economic situations, but they can also be a legal necessity for businesses facing insolvency. Let’s explore the main benefits in a little more detail.
Professional guidance
Insolvency practitioners (IPs) from companies such as Chamberlain & Co are specifically trained in the field of insolvency. An experienced IP will have likely guided hundreds of other businesses through similar situations to those that you’re facing, and will be able to leverage that experience to your benefit. Whether you need to liquidate your business or you want to consider some form of restructuring or refinancing, an IP will play a vital role in that process.
It’s a legal requirement
Aside from how practically beneficial the advice from an IP can be, in most cases, it’s also a legal requirement under the Insolvency (England and Wales) Rules 2016 to appoint one to take you through insolvency proceedings.
Failure to comply with these legal requirements can result in a range of serious legal ramifications, including being barred from acting as a director for a specific amount of time. If your business is already insolvent, it’s important that you don’t allow things to get even worse.
Creditor negotiation
Depending on what kind of situation your business is in, it may be necessary to negotiate with creditors. This needs to be done, but it can be challenging, especially if there are outstanding debts that you are unable to pay in full.
Your insolvency practitioner will be able to act as an intermediary between your creditors and you, negotiating how you can all move forward in a manner that’s fair and in accordable with any relevant contractual obligations.
Efficient liquidation
If your insolvency practitioner deems it necessary to liquidate the business in question, then they will be able to take the business through that process as efficiently as possible. It’s their duty to ensure that they get as much as reasonably possible for the assets in a given timeframe, and to then distribute the proceeds according to legal priority. This is the main practical part of taking a business through severe insolvency, making it important that it’s carried out properly.
An independent perspective
Finally, one of the main benefits of engaging an insolvency practitioner is that you get to access an independent, objective professional perspective. It’s likely that you’re in a stressful position, being pressured by your creditors and a range of other parties, making it hard to separate what’s actually going on from the general mood of panic.
Your IP will be able to provide you with a point of informed reason, ensuring that you don’t do anything that’s unnecessary and potentially damaging to your business.
There are many instances where seeking the assistance of an insolvency practitioner can be invaluable. Whether you think your business may be facing financial difficulties in the near future or you need to navigate a liquidation as soon as possible, it’s important that you seek the advice of an experienced IP as soon as possible.
