Frequently asked questions

The earlier you seek advice, the better. The most important thing is to not bury your head in the sand. As a director of the company, you have a legal duty to take reasonable steps to minimise the loss to creditors of the company – simply walking away from the business does not absolve you of this duty and may even put you in breach of it. Those businesses that identify the issue and take steps to find a solution stand themselves a better chance than those who let things get to a crisis then realise there’s an issue. Licensed Insolvency Practitioners (often referred to as “IPs”) can provide advice on the best course of action – The Insolvency Experts will provide free initial consultations. When you meet with us, we will begin to understand your current position and the reason you’re in it, we’ll review your business and look at the possible outcomes. There are many solutions other than simply putting the business into administration or liquidation. For example, it may be that the current situation can be rectified with additional financing or agreements with creditors. We are here to help. Many directors believe they should simply “stay on the wheel” while the company is continuing to earn revenue but this can be one of the worst things a company director can do. If it could be deemed that the business continued to trade with no reasonable prospect of avoiding insolvency then as a director you may be liable for “wrongful trading” if it does become insolvent. If this is the case, as a company director you could become personally liable for the debts of the company (despite the company status), and be disqualified from being a director.