Don’t ruin your career in business…
One of the main reasons to enlist the help of an insolvency practitioner is to make sure that old ghosts don’t come back to haunt you once your business has finished trading. There’s a lot that can go wrong when you first realise that you business is insolvent, and some directors might be tempted to ignore the signs and try to overturn the odds. Not only is this irresponsible but it could also land you in a lot of trouble that isn’t easy to shake off when you company does eventually fold. Hiring a liquidation professional at the first sign of insolvency will give you the awareness and insight you need to start winding up the company cleanly, leaving you with a crystal clear record to carry on and pursue your entrepreneurial ambitions.
It’s for the good of your company.
Did you know that if your business is insolvent there might still be a chance to save it? Insolvency is, at its most basic level, a situation where you owe more money than you’re making. When this happens, liquidating you assets is the usual response and the most efficient way to pay off creditors before you effectively close the business, but it doesn’t have to stop there. Providing you enlist the help of a liquidation professional to oversee the distribution of your assets and the settling of debt, a court may allow you to carry on using the same business name, effectively starting with clean slate, after the process is completed. Remember though, it is regarded as highly irresponsible (and illegal) to carry on trading even when you know your company is insolvent. A good rule of thumb is to ‘honour thy neighbour’ and make sure you put your creditors first.
Your reputation and credit rating could be damaged.
By opting not to use an insolvency professional your case will have to be settled directly by the courts. The courts tend to frown on those business who shoulder the insolvency process on their own, and they’re likely to give a ruling which not only halts the business but severely damages the directors’ reputations in the process. Many people have spoken of how they wish they’d started the liquidation process sooner; it doesn’t necessarily have to be a bad thing. Recognising that your business is insolvent and acting before it becomes too problematic is the sign of a responsible business person, and it can really help take a lot of pain and stress away from you.