By Julie Palmer on Small Business UK – Advice and Ideas for UK Small Businesses and SMEs
In its latest report, the Insolvency Service has warned of firms falsely offering a ‘legal alternative to using insolvency practitioners’, misleading directors and losing millions of pounds of assets in the process.
But how can small business leaders protect themselves against these firms when the stresses of business distress are leaving them vulnerable?
In recent years, we have seen a growing number of firms offering insolvency services they are not qualified to deliver, or making promises they cannot legally keep.
The Insolvency Service has acknowledged this issue by closing several such firms, and dedicating part of its annual report to showing how it is tightening its grip on them.
It is evident that these unlicensed firms are viewing the stressful experience of winding down a business as an opportunity. Many owners are seeking a way out and anyone offering a simple, quick and seemingly inexpensive solution will no doubt be welcome.
Yet, it is these promises that the Insolvency Service is warning against.
Challenging the firms themselves
A number of unlicensed corporate rescue firms have been identified as falsely claiming they can provide ‘a legal alternative to using insolvency practitioners’, misleading