Company Financial Insolvency
In the UK a company may fall into financial trouble, where this is the case this may not be the end of the road for that organisation and in most cases it may be able to survive and start to begin trading again and even flourish. There are lots of things a company can do when they find themselves in this situation and here we discuss some of the options a company may have.
Whats a Company Voluntary Arrangement?
This type of solution assists a company by engaging in a formal process that has to be instigated by the directors /shareholders of that organisation. In essence the good old Company Voluntary Arrangement (CVA) allows the company to try and put together a survival proposal and then present that to its creditors. If this proposal is backed by 75% of those companies then it becomes legally binding.
Once the agreement is in place then in most cases all the creditors of the company are legally bound to accept the terms and conditions of the CVA. You will need a licensed Insolvency practitioner to assist in all aspects of making sure that the CVA is put together correctly prior to presenting it to the creditors.
This type of solution is generally responsible for creating a rapid resolution to the insolvency issues by freezing the money owed to creditors immediately. Once the agreement is working creditors can accept between 25% and the full amount 100% of the funds owed to them, this immediately takes the pressure off the company.
Using solutions like this the company can often quickly start to recover and ensure that they are able to start doing business again and even get the company to a point where they can make it profitable again. It should be said that this is not the only solution available to companies who have fell into financial issues. There are several other things a company can do when financial issues strike and we will cover more of these in subsequent articles.
When organisations do slip into these issues they can get expert help that will often assist them in the business recovery process. Its now becoming even more accepted that more and more companies are now slipping into insolvency problems, this is largely because of the recession in this country and more and more companies are now needing help to resolve these issues.
In the UK a company may fall into financial trouble, where this is the case this may not be the end of the road for that organisation and in most cases it may be able to survive and start to begin trading again and even flourish. There are lots of things a company can do when they find themselves in this situation and here we discuss some of the options a company may have.
Whats a Company Voluntary Arrangement?
This type of solution assists a company by engaging in a formal process that has to be instigated by the directors /shareholders of that organisation. In essence the good old Company Voluntary Arrangement (CVA) allows the company to try and put together a survival proposal and then present that to its creditors. If this proposal is backed by 75% of those companies then it becomes legally binding.
Once the agreement is in place then in most cases all the creditors of the company are legally bound to accept the terms and conditions of the CVA. You will need a licensed Insolvency practitioner to assist in all aspects of making sure that the CVA is put together correctly prior to presenting it to the creditors.
This type of solution is generally responsible for creating a rapid resolution to the insolvency issues by freezing the money owed to creditors immediately. Once the agreement is working creditors can accept between 25% and the full amount 100% of the funds owed to them, this immediately takes the pressure off the company.
Using solutions like this the company can often quickly start to recover and ensure that they are able to start doing business again and even get the company to a point where they can make it profitable again. It should be said that this is not the only solution available to companies who have fell into financial issues. There are several other things a company can do when financial issues strike and we will cover more of these in subsequent articles.
When organisations do slip into these issues they can get expert help that will often assist them in the business recovery process. Its now becoming even more accepted that more and more companies are now slipping into insolvency problems, this is largely because of the recession in this country and more and more companies are now needing help to resolve these issues.