Possible outcomes - Insolvency Advice Centre

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Possible outcomes

Your business is in danger of insolvency and you have called in an insolvency practitioner. A thorough professional investigation will ensue which will highlight the symptoms and determine the solution.

There are 3 main outcomes which will differ dependent upon the symptoms and solutions. The outcomes are turnaround, business rescue and winding up. While all effort will be made to turnaround and grow your business the other outcomes may result in loss of business. The priority of the insolvency practitioner is to turnaround and ensures growth of the business.

Main outcomes:

  1. Turnaround- your business is recovered without resort to formal insolvency procedures. This involves financial restructuring, working capital management, negotiation with creditors and raising finance, manufacturing processes, pricing, product offering, marketing and staff.
  2. Business Rescue
    • Company administration- a process of administration that requires the appointment of an insolvency practitioner as the administrator. An administrator can be appointed by the company, your directors or holder of a charge (the bank). When an administration order is used this means the company is ring fenced, protecting it from new legal action or continuation of existing legal action. This will give the insolvency practitioner breathing space to investigate and formulate solutions.
    • Company Voluntary Arrangement (CVA) - this being a legal procedure whereby your company will enter into an agreement with its creditors which states how the debts and liabilities will be addressed. It allows the insolvent company to pay back a proportion of its current debt out of future profits. This allows the company to continue trading rather than be wound up or liquidated and the opportunity for creditors to have a portion of their debt honoured. It also allows directors to retain control of the company. The company voluntary arrangement allows a company to pay its liabilities either in part or full over a period of time.
  3. Winding Up- Company Liquidation- a formal insolvency process when trading cannot continue and creditors cannot be paid. During liquidation all the assets of your business are sold. The proceeds are used to fund first the liquidation process then to pay the creditors. During liquidation all directors must ensure the business does not deteriorate, they must protect the interest of the creditors. After investigating the symptoms and studying solutions the insolvency practitioner will decides the only option is to wind up the company.

Remember your insolvency practitioner will strive to turnaround your company. The sooner you make contact the better chance of survival.


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This website has been written and intended for registered limited companies in the UK only. The site contains general information and resources for limited companies only in financial trouble. Insolvency Helpline only work with limited companies to offer solutions for their business debt problems. Insolvency Helpline cannot offer help or advice any other entity except limited companies. Insolvency Helpline does not advise individuals, sole traders or partnerships seeking debt advice. If you are an individual, sole trader or partnership seeking advice, we recommend using an alternative service.

© 2013 Insolvency Helpline
Tel: 0800 668 1391 | Email: info@insolvencyhelpline.co.uk | Web: www.insolvencyhelpline.co.uk