Originally written by Andrew Shipp on Small Business
These are without doubt, unprecedented times. Small businesses in virtually every sector are struggling financially and facing concerns about what is ahead and how they will survive.
Since May over a million bounce back loans have been issued, the 100-per-cent Government-backed loan scheme to support small businesses during the pandemic. But according to banks, it’s expected that half of these loans won’t be paid back, with many small business kicking bad debt further down the road.
If your company is “insolvent” – meaning it’s unable to pay its debts – or you’re worried that this is likely to be the case in the near future, then it’s important to consider your options.
>See also: Where to find your £5,000 small business technology grant
As a director, not only do you owe various duties to the company, including to act in its best interests, but you also face the risk of personal liability for debts incurred by the company, if you continue to trade once you are aware, or should be aware, that the company is insolvent.
There is no “one size fits all” solution if your company finds itself in such a position. For some, liquidation may be