Plan A for Companies or Partnerships; Avoid Insolvency

Published on : 14th April, 2020 | Updated on : 10th February, 2025

Categories:

Partnerships

Is there a way that I can avoid formal insolvency?

Is there a way that I can avoid formal insolvency?

Yes, Plan A for companies or partnerships; An informal deal with creditors, coupled with possible refinancing

Using the threat of the insolvency options can be like the proverbial Sword of Damocles , you can wind the company up, possibly go personally bankrupt or enter an IVA but the creditors would undoubtedly see a compromise or even complete discount of their debts if that occurred.

Being prepared to argue with creditors that the informal route means at least some if not all of their debt is recovered and that this approach will allow you to practice in future, is the common sense solution.

KSA Group will always however make sure that the options of company voluntary arrangement and liquidation have been assessed, a statement of affairs prepared and valuations of any properties obtained to counter the why wait for money what if we simply wind the company up? question. The main thing to remember is we are prepared for their aggressive questioning.

So pointing this out bluntly, allows us to prepare a plan for the recovery of the creditors monies over a considerable period of time say 8-12 months. Yes even if HMRC has rejected YOUR suggested time to pay proposals.

We would generally insist on the following work being part of our restructuring brief;

Detailed DAILY CASHFLOW we can provide the tools and assess this for the company. But this MUST be introduced and to help survival you or your admin people must update every day.
Statement of affairs for the company. Probably requires a desk top valuation of any corporate property. KSA will do this confidentially as part of the brief.
Detailed financial forecasts for the partnership business. What if scenario planning ie what if turnover falls, WIP is not all collected for example?
Negotiations with the creditors (usually HMRC and the bank) in person and where required in writing led by KSAs experienced debt negotiators.
Possible assessment of your personal property and assess possibility of new debt from property(ies)

This process can be delivered in 1-3 weeks from engagement and is led by very pragmatic experts in this field. Before commencing we will set out the strategy plan in writing. This work is always costed in writing in our unique solutions report which is provided FREE after your first meeting with a KSA Director or Regional Manager.

Call KSA Group on 08009700539 for details

A word of warning. If your company or limited liability partnership has relied upon multiple time to pay deals over recent years with HMRC and these deals have regularly not been adhered to, then this first option may not succeed, but we believe it is still worth trying.

Monthly Insolvency Statistics: February 2025

20th March, 2025 in Research and Statistics

After seasonal adjustment, the number of registered company insolvencies in England and Wales was 2,035 in February 2025, 3% higher than in January 2025 (1,978) but 7% lower than the same month in the previous year (2,188 in February 2024). Company insolvencies over the past year have been slightly lower than in 2023, which saw a 30-year high annual number, but have remained high relative to historical levels. Company insolvencies in February 2025 consisted of 393 compulsory liquidations, 1,520 creditors’ voluntary liquidations (CVLs), 115 administrations and 7 company voluntary arrangements (CVAs). There were no receivership appointments. Compulsory liquidations were higher than in January 2025, while CVLs, administrations and CVAs were lower. The (seasonally adjusted) number of compulsory liquidations in February 2025 was the highest monthly number since September 2014.One in 191 companies on the Companies House effective register (at a rate of 52.4 per 10,000 companies) entered insolvency between 1 March 2024 and 28 February 2025. This was a decrease from the 57.6 per 10,000 companies that entered insolvency in the 12 months ending 29 February 2024. Insolvency rates are calculated on a 12-month rolling basis as a proportion of the total number of companies on the effective register. The 12-month rolling rates show longer term trends and reduce the volatility associated with estimates based on single months.CVLsIn February 2025, CVLs accounted for 75% of all company insolvencies. The number of CVLs decreased by 2% from January 2025 and was 13% lower compared to the same month last year (February 2024) after seasonal adjustment.In 2024, the number of CVLs declined for the first time since 2020. This came after three years of increases, peaking in 2023 at the highest annual total since the time series began in 1960. Between 2017 and 2019, CVLs had been rising at approximately 10% per year, but during the COVID-19 pandemic, they fell to their lowest levels since 2007.Compulsory liquidationsSeasonally adjusted compulsory liquidations in February 2025 were 41% higher than in January 2025 and 49% higher than in February 2024. In recent months, compulsory liquidations have escalated. The greatest monthly number since September 2014 was February 2025.Compulsory liquidations rose 14% from 2023 to 2024, the highest amount since 2014. This increased from record lows in 2020 and 2021, despite constraints on statutory demands and winding-up petitions (leading to compulsory liquidations).AdministrationsThe number of administrations in February 2025 was 18% fewer than in January 2025 and 27% lower than in February 2024, after seasonal adjustment.In 2024, administrations rose 2% from 2023 and were slightly higher than 2015–2019 totals. Since 2022, administrations have increased from an 18-year low in 2021 during the COVID-19 epidemic.CVAsThe number of CVAs was 42% lower in February 2025 than February 2024 and 50% lower than in January 2025. Numbers remain low compared to historical levels. CVAs are not seasonally adjusted due to low volumes.In 2024, the number of CVAs was 9% higher than in 2023 and over 80% higher than in 2022, which saw the lowest ever annual total in the time series going back to 1993. Despite this increase, the number in 2024 was slightly less than 60% of the 2015 to 2019 annual average.What is causing the changes?The most common creditor in any insolvency is HMRC. In the last few months, having held back for many years as companies have recovered from the recent headwinds, HMRC is now losing patience with companies that owe tax.

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Monthly Insolvency Statistics: February 2025