Questions to ask any advisor
There are lots of websites out there that offer advice on insolvency options for businesses.
It should be remembered that there is less legal protection for businesses than there is for consumers as business owners are expected to be able to make informed decisions. Unfortunately, when businesses find themselves in distress the directors may make decisions in haste.
So what do you need to look for when looking for advice?
Who are they?
Perhaps the most important thing is to check that you can see exactly who they are. Some websites do not have any details about who works there and are not an actual company at all. What they may do is sell your lead onto someone else who may end up charging you more than was originally expected and you know nothing about them.
Did they approach you direct?
There is nothing wrong with this in theory, as directors do sometimes need to be persuaded to take action but, do bear in mind the points covered before deciding to go with them.
Did they ask enough questions?
Every case is different and there are different solutions for different problems. Some advisers will send you down a particular path such as liquidation or pre pack without knowing enough about the facts and will discount other options out of hand.
Do they say advice won't cost you?
Obviously if a company is short of money then promises of help not costing you anything is tempting i.e the creditors pay? Be honest and think is this too good to be true?? Err most likely...! Even if they do some work for free it is likely to be of low quality and may well expose you to personal risk. We offer a free examination of the options of course. Also in some cases advisers will say that any payments to creditors and fees should be personally guaranteed. So if the business fails in its turnaround the adviser gets paid out of personal monies. Do you want to take that risk? The incentives for getting a working solution are not there.
How long have they been in business?
Check the company, if they have one, on companies house or www.duedil.com for a proper trading record. Especially if they claim to have been in business for years. We have nothing against new start ups as we all have to start somewhere!
Are they licensed?
This is a crucial point as only licensed insolvency practitioners can do administrations, pre packs and liquidations. They also need to be the supervisors and nominee of any CVA proposal. Anyone who claims that you shouldn't go to insolvency practitioners is basically saying don't go to someone who is overseen by a regulatory authority and has to abide with strict rules and etiquette to protect the interests of stakeholders. Instead come to me with no protection or recourse! Fortunately these claims are less frequent these days. You can check to see if a firm has insolvency practitioners. Bear in mind that as long as the firm has insolvency practitioners in it then they can take appointments. If there are no insolvency practitioners in the business then they will obviously have to pass the enquiry onto to someone else outside!
Do they have examples of their work and or testimonials?
This is sometimes difficult to obtain. However, case studies are a good indicator of legitimacy.
Questions to ask:
Q. Are you actually licensed?
A. Yes we are! Some people say that you should not contact licensed IPs as this puts you at risk of personal liability. This is simply not true. Using unlicensed practitioners means there is no guarantee of the quality of the advice and no redress. In addition non licensed advisors will need to refer you to an insolvency practitioner who will charge again.
Q. How many companies have you actually turned around?
A. We have helped over 700 businesses in the last 18 years. Please read some of our case studies and testimonials.
Q. Will it be expensive?
A. All fees are agreed in advance in writing. We provide exceptional value for money and our fees are paid over a period of time (sometimes many weeks) from the cashflow savings we make for your business. We will meet company directors for free followed up by a (free also) 30 page solutions report. Note also that we do not ask for personal guarantees on the fees or contributions into a CVA (unlike some of our competitors).
Q. Do you have a good relationship with the HMRC?
A. Yes. Over 80% of our CVAs are approved and HMRC knows that our CVAs are professionally prepared and are usually considered appropriate for the circumstances.
Q. Can I get a testimonial?`
A. Yes, if you give us a call we can give you contact details of happy clients! Likewise, see our page on testimonials.
Q. Another insolvency firm told us we have to pay 100p in £1 to HMRC when we propose a CVA, is this true?
A. No. that is absolutely not the case. HMRC and other creditors may accept a dividend of well below 100p in £1 if the deal is well structured. It maximises THEIR interests and looks affordable for the company paying the money back. Of course, if that advisor has not prepared many CVAs they may not know this.
Through this website we provide high quality, easy to understand advice on turnaround and insolvency problems. You can get plain talking answers in 30 minutes, free of charge. Give us a call today on 0800 970 0539.