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23 March 2020COVID-19
I have been asked the question by the directors of a company in light of the economic impact of Covid-19 should I just ‘throw the towel in’ and start again. This is an interesting question and will very much depend on the individual circumstances of the entity.
To enter into an insolvency procedure such as an insolvent liquidation or administration then the company needs to be insolvent which means that it either cannot pay its bills as they fall due or that the value of its assets is less than the level of its liabilities.
Pros to throwing the towel in
Cons of throwing the towel in
It will be a very hard decision for directors to go into liquidation / administration and is certainly not a decision to be taken lightly – sometimes the extent of the creditors and poor prospects for the future may mean that this however is the only viable option.
If you want to talk about the options for your business including turnaround, company voluntary arrangement, liquidation or administration please contact Sandra Mundy for a free of charge initial consultation.