❌What to check before you close your company

❌ What does an insolvency practitioner look for when they investigate

💷 PREFERENCE PAYMENTS 💷

Once your company becomes insolvent your duties as a director change and your responsibility is to the companies creditors and to treat them equally and not make any of their positions worse.

Quite simply paying off one debt over another is classed as a preference and can cause you problems in an insolvency procedure.

Lots of business owners tend to pay the person which screams the loudest , you should avoid this at all costs.

You might be tempted to pay suppliers who you have built up a good relationship with, or paid off debt that you have personally guaranteed , or even paid off loans from friends and family. These are all examples of preference payments that an insolvency practitioner is going to scrutinize.

If you have made payments like this then potentially they will be asked to pay them back by the insolvency practitioner.

As soon as you suspect your company is becoming insolvent you need to take advice quickly to understand what your options are and to check if there are any implications personally for you.

Any questions please let me know,


All the best,

Chris
1st Business Rescue

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