Restructuring and insolvency

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Early action is the key to businesses avoiding or surviving financial difficulties. This guidance covers: how to recognise issues when they arise, what advice to seek and who to approach. It explains the role of licensed insolvency practitioners, the six signs an organisation is in distress and the seven stages of business recovery.

Most people launching a new business do so with hope and optimism. All hope it will succeed, but most also know that along the way they will experience challenging times.

Cash rarely flows in the steady stream business owners would like. The cost of business can rise sharply and unexpectedly. This can make managing liquidity tough. The difference between businesses that survive and thrive and those that fail is how well they manage difficulties.

Being aware of the dangers from a very early stage and knowing whether they are at the start of a long-term decline, or merely going through a short dip, can help owners take the early action that can save their business. That might be a restructuring professional or a licensed insolvency practitioner (IP).

Insolvency remains difficult to talk about. There is still ‘failure stigma’ attached to even asking an IP for advice. It’s important to remember that while this advice can include putting a business into a formal insolvency procedure, not every visit to an IP leads to insolvency and it can involve advice that saves businesses.

Insolvency at a glance

As part of its guidance to businesses on the different stages of recovery, ICAEW provides an overview of what the term insolvency means in reality for companies, the roles of the Official Receiver and Insolvency Practitioners and the different types of creditors.

Restructuring success story

Watch the real-life success story of how a UK manufacturing business was turned around after recruiting the support of an ICAEW Insolvency Practitioner.

Six signs that a business is in distress

Business can avoid insolvency by taking action before its too late, here ICAEW outlines the six warning signs that a firm is in financial distress and needs to implement recovery measures.

Seven stages of business recovery

The first step for any organisation in avoiding succumbing to finance difficulties is awareness. Here ICAEW outlines the seven stages of business recovery, which follow the decline and recovery curve.

What is an IP?

An Insolvency Practitioner is someone who is licensed and authorised to act in relation to an insolvent individual, partnership or company.

Corporate insolvency measures

Definitions of four examples of measures that are frequently implemented in cases of corporate insolvency, from ICAEW’s guidance on business recovery.

Content reproduced courtesy of ICAEW