What should a Director do if they think their company might be Insolvent?

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What should a Director do if they think their company might be Insolvent?

Well, first thing is don’t panic. The second thing is take advice from a regulated Insolvency professional. This is a specialist area of law, and you need to have the right person advising you. Insolvency Practitioners have a number of tools available to help them help companies that are suffering from financial difficulties. This ranges from things like a Company Voluntary Arrangement, where you do a deal with creditors and perhaps pay some or all of the debt over a period of years, through to Administration where you get protection from any hostile creditor action whilst a rescue plan is being put together.

The main thing is to remember that as a Director your responsibility, if the company is Insolvent, is to the creditors of the company. So you need to protect yourself by getting the correct professional advice and give your company or business the best chance of surviving through its difficulties.

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