It’s an unfortunate reality that some businesses fail. It’s estimated that as many as one in five businesses in the UK fail in any given year. Many of these businesses are limited companies that are directed and run by their owners. Meaning that the company’s directors and shareholders are the same people. In 2021 an estimated 75% of private sector companies were run solely by the company’s owner. If you’re an entrepreneur, a tradesperson, or a small business owner in the UK and you’ve encountered financial difficulties with your business, you are not alone. Many of the business owners who seek advice from FD Business Rescue are in that demographic, and a common question that we often get asked is if it is possible to start a business again after failure. If you’ve formed the view that it may not be possible to rescue your limited company and you’re worried it may be the end of your business venture, you should know that it is possible to start again.
What can I do?
Our insolvency practitioners can explain the options available to you and discuss the most appropriate course of action for you and your company. It’s important to understand that when an insolvency practitioner is appointed as the Liquidator of a limited company their principal job is to act in the interests of the company’s creditors. However, insolvency legislation recognises two important considerations:
- That a company’s owner may be a tradesperson or small business owner who makes their living from the work the company does, and that the company may own items (tools of a trade, stock, licences) that the owner will need going forward in order to make a living; and
- That it may be in the best interests of the company’s creditors for the company’s assets to be sold (at fair value) to the company’s owner.
If a company’s owner wants to buy assets from an insolvent company to start their business again, that can be done under the right circumstances. Our insolvency practitioners can advise you on whether this is appropriate in your case. If it is, we can help you to obtain a professional valuation of the company’s assets and explain how you demonstrate to the company’s creditors that you have considered how their interests are best met. Our insolvency practitioners can assist you with proper disclosure of the proposal to company’s creditors, making sure that the plan is implemented with the consent of the creditors.
Our insolvency practitioners can also assist you with putting the company into a formal insolvency process. In order that the company’s creditors are treated correctly, and the company’s life can be brought to an end after the insolvency process.
Get in touch
Want to speak to an advisor about starting a business again after failure? Contact us us now, we will be more than happy to help you and your business.