Why You Would Liquidate Your Company

In today’s shaky Irish economy it is becoming far more common for a company to experience financial difficulties. It is the nature of running a business to have a need find ways to generate more funds. The traditional route for companies has always been to apply for funding from their banks. However, with the ongoing credit crisis in Ireland showing no signs of a let-up, the current problems within the banking institutions, and the downturn of traditional demand for services and products, a lot of Irish companies are finding they can’t keep up with servicing their business debts to the banks, and to their creditors.

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When Insolvency Can Be To Your Benefit

Insolveny In Ireland - When Insolvency Can Be To Your BenefitAlthough it sounds like a ridiculous statement, it is indeed true – you can turn insolvency to your benefit.

Business insolvency could mean a fresh new start for a sinking company. When a business lacks the ability to pay off its mountain of debts from different creditors, it definitely is not an option to just take no action and stress over these problems for weeks. Your business problems need to be resolved by tackling them head-on.

But “How do I do that?,” you may well ask.

Dealing with the company’s continually increasing debts involves due legal process. And it is better to do this immediately to avoid further damage and risks. This resolution process means seeking external help; you will need solid insolvency advice.

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Understanding the Role of an Insolvency Consultant

Today it is even more common for businesses to find themselves facing economic hardship; everyone is feeling the pinch from the economic downturn. When a business can no longer sustain itself or their liabilities far outweigh their assets, the business is deemed to be insolvent. When it looks like a company is headed down this path an insolvency consultant may be asked to step in and guide the business to firmer ground, or to liquidation. These individuals specialise in insolvency, particularly the laws concerning it.

Assessment

The first thing an insolvency consultant is going to do is look at the business as a whole to determine if restructuring is a possibility. They will check into management backgrounds, assess the assets and liabilities, test the market and then work to come up with a viable solution that is in the best interests of all concerned.

Options

Once the initial assessments are complete, an insolvency consultant will then take you through which options are available to your company. There are several ways to deal with financial difficulties including bankruptcy, liquidation, restructuring and more. Which of these is best for your business will depend on many factors such as whether or not it is a temporary situation. If the market appears to be recovering and your company is not too stretched, you may be able to continue trading.

Example:
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What Is Voluntary Liquidation?

Insolvency In Ireland - What Is Voluntary LiquidationEven today, there are companies that find themselves in financial difficulty and file for bankruptcy.  This drastic step is often unnecessary because there are other options that can be taken. Bankruptcy should be a distressed company’s last resort, as the other options are a lot less severe on the reputations and credit ratings of the company directors involved.

The saying “It’s not over ‘till the fat lady sings” applies just as much to a distressed business as to an opera.  A distressed business may appear to be ready for it’s final curtain call, but a company director needs to get the best professional advice he can at this time.  An insolvency consultant can assess the full business situation and can often work out if the company can be saved, or not. But even if the insolvency consultant advises that the business is not in a position to continue trading, they can advise on the appropriate course of action to take to wind up the company. One such alternative action is Voluntary Liquidation.

Voluntary Liquidation Explained:

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How You Can Control Business Costs

How You Can Control Business CostsIf you want to protect your business from insolvency and bankruptcy, it is important to get business spending under control and keep it that way. Business costs can sink your company in very short order, and sometimes it seems impossible to keep these numbers down, particularly when you are trying to grow your business. However, if you will keep a few basic ideas in mind and employ some of the best minds available you can control business costs and keep your company afloat.

Ongoing

It may become necessary at any stage of the game to cut costs, adjust spending or otherwise revamp your company’s financial picture. This is particularly true when you are experiencing a down turn; however, you should realize that many businesses go bankrupt when things are going fine. Cost management needs to be an ongoing process and you should continually look for areas where you can save money.

Accounts

Do you have dormant accounts that see little if any activity? It is a good idea to shut these down and consolidate as many accounts as possible. You will save money on bank charges as well as prevent misappropriation of funds or the risk thereof. Wisdom also says you need to reconcile all open accounts on a regular basis watching for mistakes.

Are you getting the best possible rates on all of your business accounts? Do not be afraid to negotiate with your financial institutions for better rates than you are currently receiving. Businesses that have multiple accounts or have had a longstanding relationship with a bank are in the best position to receive this type of adjustment.

Manage Debt
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