MartinDomm, Author at AS Need Family Thing

Realising that the company that you started isn’t going to survive is tough, but blindly persevering when the writing is on the wall is never a good idea.

Sometimes it can be difficult to differentiate between a tough period of trading that you will eventually recover from and a business that simply isn’t financially viable and will eventually become insolvent.

If there is no route forward that will save the company, liquidation may be the only option, but this doesn’t need to be a lengthy process that drags on for many months. With the right insolvency practitioner in place and an agreement between all the company directors that liquidation is required the entire process of dissolving a company can be completed in a matter of weeks.

This is only possible, however, if you instigate proceedings at the right moment, and do not wait until you have failed to meet repayments on your business loans for several months and creditors decide to take legal action.

Being proactive is vital to dissolving a company in a relatively pain free manner and in order to do just that it is vital that you know the signs that your company is struggling and may need to be liquidated.

Here are some of the most common warning signs of a company that may need to be liquidated:

You are no longer able to pay creditors

Cash flow issues are common, especially among smaller companies and do not always indicate that the business has no future at all.

However, if your financial problems have reached the stage where you are no longer able to pay your creditors on time this could be the start of much more serious issues.

A single late payment is unlikely to result in the dissolution of your company but if you are constantly being sent late payment notices and find yourself unable to come close to meeting the agreed repayment schedules, liquidation may not be far away.

In fact, if a creditor decides to take matters into their own hands and submits an application for a winding up order as a result of lack of payment, you might not even have a say in the matter.

You cannot fund your business

Businesses need investment to thrive and if you are barely managing to pay your investors the chances are you don’t have much spare to invest.

If you cannot buy new stock, hire appropriate staff, or fund everyday activities for the business, the quality of the service you provide is going to suffer and your problems are only going to grow larger as a result.

You can no longer find additional funding

If the bank or creditors are no longer willing to lend you money to fund your business, this is a sign that you are no longer considered a viable investment.

The people responsible for making these decisions are highly experienced and if they have concerns over the ability of your business to be successful it might be time for you to do the same.

If you are at the limit of your overdraft or the bank is demanding that you provide personal guarantees before they release funds, this means that you and your personal assets are liable not only those of the business, this is another sign that you are treading very close to the line when it comes to financial responsibility.

You don’t have control over your business

Knowing everything there is to know about the business you run is critical to your success.

If you find that there is information that you do not have access to, especially if that information is related to company finances is a sure sign that things are not as they should be.

It is essential that you are able to access information regarding the performance of the company, including reliable forecasts, and cash flow records.

This information is key to determining if the business continues to be viable and whether or not liquidation may be required in the near future.

It is also essential to keep track of exactly how much you owe to your creditors and the repayment schedules you have agreed to.

Before you can make any decisions regarding the future of your company, all this information should be examined and discussed between you and your fellow directors. If you decide that there is no route forward that will see the company trading profitably then voluntary liquidation may be your best route.

It can be difficult to take a logical view on liquidating a business you have worked hard to establish and this is where having Business liquidation services on hand can be so helpful. They will give you all the advice you need based on the facts available and guide your through the process should you decide to proceed.