Business Advice
March 1st, 2010 by admin
Dealing with a Company’s Financial Troubles
With the increasing number of companies facing financial troubles due to the economic recession, a lot of these businesses are on the verge of bankruptcy. Many of these companies have no other choice but to file for business bankruptcy. When a company becomes bankrupt it means that it is already insolvent. This happens when the company is no longer able to pay its creditors. Its debts are far greater than its profits.
If the troubled company decides to go through company liquidation or insolvency, a licensed insolvency practitioners (IP) will be designated as its administrator. The licensed IP will oversee the sale of the company. He will also hold a meeting with all of the company’s creditors. After the liquidation and all the remaining assets are sold, the money from the sale is shared pro rata among the creditors. The licensed insolvency practitioner should also inform the Companies House that liquidation of the company has taken place.