Nationwide Insolvency Practitioners
  • Home Page
  • About Us
  • News
  • Contact Us

Call FREE Business Rescue Advice: 03003 038284

Request a consultation
  • Liquidation
    • Company Liquidation
    • What is Creditors’ Voluntary Liquidation (CVL)?
    • Members’ Voluntary Liquidation
    • How Long Does it Take?
    • How Does it Work?
    • How Much Does it Cost?
  • Administration
    • Company Administration
    • Pre-Pack Administration Process
  • CVA
    • Company Voluntary Arrangement
  • HMRC Debts
    • HMRC Arrears
    • HMRC Time-to-Pay Arrangements
  • Winding Up Petitions
    • How Do Winding Up Petitions Work?
    • How to Stop a Winding Up Petition
  • Help Centre
  • Get a Quote
    • Liquidation Quote
    • Administration Quote
    • CVA Quote

Expert Advice 03003 038284

  • Free Advice

Do you need Advice, or want to close your business?

    Your data is secure
    1. Home
    2. News
    3. Are big companies immune to insolvency?

    Are big companies immune to insolvency?

    Man on two phone calls with a phone in his hand Insolvency

    [vc_row][vc_column][vc_column_text]

    We sometimes think of insolvency as something that happens only to small businesses, when they’ve been struggling to build up their customer base or have been hit hard by a relatively small change in circumstances.

    It’s easy to understand why big companies can seem immune. After all, don’t they more easily absorb the changes in customer numbers that would cause a small business to crumble?

    With BHS becoming insolvent in early 2016, after once being a household name, and with a generation of children now growing up having never seen a Woolworths store on their high street, it’s certainly worth remembering that insolvency can happen to anyone.

    What is insolvency?

    Insolvency occurs when a business has run up debts, with no practical way to pay them off.

    When a person is insolvent, they’ll likely go through the bankruptcy process. A business will end up going into liquidation, administration or receivership.

    Liquidation typically involves immediately closing the business, whilst administration is a process intended to rescue the company if it’s possible. Of course, even if the administration process is successful, what’s left at the end will be very different to what was there before.

    So, any company can become insolvent?

    Insolvency isn’t limited to the smaller companies. Any business can owe more than it can afford to pay, whether that’s a small business with £1,000 of debt or a larger business with £100,000. The bigger the business, the higher the value of the trading that they’re doing and the more debt they’re likely to be in.

    Think of companies like people:

    One individual is struggling under the weight of £1,000 of store card debt from clothes shop purchases. If they’re making just £800 per month and need that money for their daily living costs, they might be unable to pay back what they owe.

    A second individual is earning £3,000 per month and could easily live on £800 of this. If they had the first person’s debt, they’d be able to pay it off. However, as they have more money they’ve been making significantly larger transactions. They’ve taken out hire purchase agreements for expensive cars, and a mortgage on a six-bedroomed house. They’re just as likely to be struggling with debt as the first person is, having purchased things that the person in our first example would never even have considered.

    It’s the same for any business. A small business might have very few costs beyond a bit of office equipment purchased on credit, but might lose one or two customers and be unable to pay its debts. A larger business could be trading in large amounts of stock, with dozens of properties across the country. If sales decrease, their situation is just as dangerous.

    Contact The Insolvency Experts

    Whether you’re a big business or small, speaking to The Insolvency Experts can help you to formulate a plan of action. Remember that no company is immune, so support is available no matter what level of debt you’re struggling with.

    Contact The Insolvency Experts today, for discreet and sensitive service. You can call directly on 0300 303 8284.

    [/vc_column_text][/vc_column][/vc_row]

    Categories

    • Bankruptcy
    • Business Rescue
    • COVID-19 Advice
    • Debt Advice
    • Frequently Asked Questions
    • Insolvency
    • Latest News
    • Liquidation

    Accreditations

    Chat with us

    Our Costs

    At the Insolvency Experts we think that our service offers excellent value for money. Depending on your circumstances, our services can even end up being effectively free of charge.


    Get a quote
    Get free advice

    © The Insolvency Experts 2016

    The Insolvency Experts is the trading name of Cowgill Holloway LLP registered at Regency House, 45-53 Chorley New Road, Bolton BL1 4QR and registered in England and Wales with registered number OC316195 with offices in Bolton and Manchester.

    Legal

    • Privacy Policy
    • Site Map
    • Terms & Conditions

    Call us now

    03003 038284

    Speak to one of our experts in Company Liquidation today

    A no obligation conversation to help determine the best route forward for you and your business

    0 of 350
    Call Me Back
    x