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Partnership Insolvency - Establish your objectives

10 August 2017

Partnership Insolvency - Establish your objectives

Establish Your Business and Personal Objectives

Now that you have read how to use the site and establishing insolvency we hope that you agree that it is best to establish just what your business and personal objectives are?

Clearly this process cannot be "all things to all men" but we have set out here the main objectives for business people, their family, their employees and their creditors.

Using the links in the text below will take you to the relevant techniques highlighted. But if you want a general outline first take a look at your Options

Business Objectives

Keeping the business alive

It is possible to keep the business alive but only if there is a reasonable prospect of restructuring, attracting more finance or even a sale of the business. If this is a key objective consider a PVA, IVA, Trading Out or Refinance. Achieving a trade sale in the timeframe available may be very difficult and the value of the business may be very low (or nil) but at least this objective may be achieved. 

Maximising interests of creditors

This should be your key objective. If by continuing to trade, creditors interests are compromised think about closure. Bankruptcy. However, if the business is viable and if the meltdown of the assets of the business would lead to minimal return for creditors then consider rescue and restructure. PVA, IVA, Trading Out or Refinance.

Maximising interests of employees

If you employ others, this is another very important area. Sometimes a rescue and restructure that costs jobs is more valuable - it saves the other jobs. PVA, IVA, Trading Out or Refinance. However, if the business is not viable continuation of trade may work against this aim. Employment and insolvency is a very specialist area, you must take advice on this area.

Maximising you own interests

Consider the personal objectives opposite.

Crystallising a difficult position

It is sometimes easier not to make a decision for fear of getting it wrong. After all, your business is a living, changing, moving thing. BUT we always recommend making a decision and working hard to achieve the outcome. In our experience the uncertainty that insolvency creates can be very debilitating. You will become less and less effective as a business person and the business will suffer. PVA, IVA, Bankruptcy, Trading Out or Refinance.

Complying with the law

As you may already know this is a difficult area, obviously we all have to comply with laws we are aware of. But if you do not know what the your duties are or what transactions you may or may not undertake when insolvent - how can you comply? Take advice, email us, speak to a commercial lawyer or speak to an IP.

Not letting creditors and customers down

Again perfectly reasonable and achievable, sometimes a pragmatic approach to this is closure. Bankruptcy. However, if the business IS viable think about the options; IVA, PVA, Trading Out or Refinance.

Not letting people down

This is an area that affects most people we talk to. But be honest with your assessment of the business viability, decide on appropriate action and explain the decision. If you are strongly in favour of this course of action and demonstrate leadership to achieve it, this is the best way not to let people down. Failure to act is not.

Personal Objectives

Getting rid of the pressure

In our experience few people set out to run an insolvent business. Because of many different circumstances the business is under pressure. As THE senior part of that business you are under pressure too. Often this can be because of procrastination - failure to make a decision. Often this is improved when a decision is taken. Whether closure or rescue and restructure there will still be pressures (of a different kind!). PVA, IVA, Trading Out or Refinance. Bankruptcy.

Crystallising the position

It is important to draw a line in the sand. Even if the decision is to explore all options, compare and discuss and then wait for other pieces of the jigsaw to fall into place - that is a decision. But monitor progress and ensure that together you are achieving the set objectives.

Getting on with your life

Perhaps it is just time to walk away and get on with something else? It is rarely as bleak as you think to close a business or go bankrupt - life does go on.

Saving your marriage

The pressures can be very difficult to leave at work. Your spouse may also be part of the business. If so, involve them in the decision making process. They often have an ability to see past the pressure points to the bigger picture. Decide if the business pressure is worth losing your marriage? Bankruptcy Doing informal deal. If it is viable and you are determined, then think of how to improve the day to day effects on your marriage. PVA, IVA, Trading Out or Refinance

Protecting your family

As saving your marriage. Remember a family is much more important than ANY business.

Protecting your health

Alcoholism, stress related illness and other problems can be caused by business pressure and failure. Consider yourself. Are you the right person for this job? Is being in business a good idea? Is the business viable? PVA, IVA, Trading Out or Refinance. If it all seems to much for your health and you cannot change lifestyle to avoid the symptoms of business pressure, then consider closure Bankruptcy.

Avoiding personal liability or personal guarantees

This is a perfectly reasonable objective from a human nature perspective. However, be warned trying to avoid this may lead to problems. Remember the mantra: "maximise creditors interests first". Of course you are usually the sole person in the business who has given security on your home. Sometimes though if the business is simply not going to work it is possible to avoid losing the house -  Informal deal or Bankruptcy . 

Not letting people down

This is an area that affects most people we talk to. But be honest with your assessment of the business viability, decide on appropriate action and explain the decision. If you are strongly in favour of this course of action and demonstrate leadership to achieve it, this is the best way not to let people down. Failure to act is not.

A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? Feel you have got into a bit of a mess? Covid-19?, How to pay wages on pay day? For reassuring advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539

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"We also follow up any meeting with a full "solutions report" which runs on average to 13 pages valuable free advice!!  No other practitioner offers this service.  In this report we advise on ALL the options and explain them clearly.  We advise on a course of action given the information you have given us ( the more information we have the better we can advise!)"

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