Use Company Rescue's top ten tips for partners of insolvent partnerships (or unregistered companies): print this off today.
- If the partnership is insolvent the law requires the partners to act in the best interests of the creditors. So rule number one maximise creditors interests in all decisions and actions, not the partners interests!
- If it smells off it usually is! Don't make decisions based upon advice from a man in the pub; these people don't know the law or how to act properly. They will get it wrong and so will you.
- When making important decisions, have meetings with your senior people and WRITE down decisions and why they were made. This is called taking minutes. This can save you from be accused of acting wrongfully in future.
- Use this website to understand the options you have. Is it STOP or GO? Is it viable or not? What does your heart of hearts tell you?
- Make a list of all assets and liabilities. Put this on a single sheet of paper. List the good things and the bad things. This will help establish the viability of the business. Do the same for your personal assets and liabilities.
- Work out your cashflow daily for at least the next 60 days. Ask us for a free, easy to use cashflow model if you need help. Control cash daily. When we do rescue work we only pay wages, insurances and essential items UNTIL we know what the plan is.
- Stop all expenditure and payments until you work out the PLAN. Break it down to simple steps.
- Set out a recovery plan if its GO. One sheet of paper is all that is needed. What steps need to be taken: do you need to cut costs, people, products, spending, drive marketing/sales? If its stop, act quickly. Call us today if its STOP.
- Meet and make a decision based upon the above steps.
- ACT fast, get professional advice; all good corporate recovery people will give you a free first meeting.
All of these steps are carefully designed to maximise creditors interests and protect you as a partner in an insolvent partnership. This is important as your personal assets and those of any spouse are at risk now.
Take advice from experts, by the way we do this stuff everyday!
Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.