• Home
  • Blog
    • Business Partner Magazine Archive
  • Free Contests and Giveaways
  • Resources
  • About Us
    • Cookie Policy
    • Disclosure Policy
    • Privacy Policy
    • Terms of Website Use
  • Contacts

Business Partner Magazine

Tips and advice for entrepreneurs, start-ups and SMEs

  • Business Success
  • Marketing
  • Finance
  • Employees
  • Technology
  • Start-up
  • Productivity
  • Communication

Understanding When Restructuring & Insolvency Are Appropriate

December 9, 2020 by Contributed Post

Click here to get this post in PDF

Too long to read? Enter your email to download this post as a PDF. We will also send you our best business tips every 2 weeks in our newsletter. You can unsubscribe anytime.

Enter your NameEnter your Email Address
A lawyer talking to a client

Restructuring and insolvency. Two terms anyone running a business wishes they’ll never have to hear uttered, and yet, they’re two of the most common practices businesses go through. In my opinion, they carry a stigma akin to someone putting their fingers in their ears and shouting to avoid hearing the truth.

I believe that by having a good understanding of restructuring and insolvency, just like any other aspect of running a business, it removes much of the mystery and makes it easier to acknowledge & handle. Let’s get rid of the worry that each carries by laying out when a certain path should be taken, and what help you would need to decide on restructuring or insolvency.

Knowing what is & isn’t contentious

Personally, I don’t like the use of the term “contentious” around these matters, but it is commonplace, and as such, it makes sense to elaborate if you hear it being bandied about. If a company has to enter into restructuring, that is seen as a non-contentious path. By that, I mean that banks and creditors work with a business in trouble outside of court to see if restructuring can help with paying back debts.

When such a restructure path isn’t possible, we’re moving into contentious works which involve litigation and possibly going to court.

Knowing what a lawyer will do

You need a lawyer at hand for either process on both sides. For the sake of this article, I want to focus on the debtor’s side, though. A lawyer will help assess the situation, which may sound flippant if you have a business where you think every avenue has been exhausted, but a good lawyer will also have some suggestions to pass on. 

When it comes to restructuring, it will typically be the lawyers who help with creditor negotiations and laying out what actions a business is willing to take (remember, they’re always going to act in your company’s best interests). When it comes to insolvency, lawyers will help with all filings and be extremely close to company accountants, ensuring that all duties are followed to the letter. This is extremely important as any improper action, even if accidental, can have greater consequences. 

Knowing when restructuring is the way to go

When it is your business, you’ll probably instinctively clamour towards the view that restructuring is the only way to go. Many business owners in this position often make the mistake of acting quite stubbornly and thinking it is something that personally needs figuring out.

I highly advise against doing such as restructuring can come about for many reasons, and not solely down to creditors knocking on the door. For example, a lack of demand and economic trends lend themselves to restructuring. You only have to look at what’s gone on throughout 2020 to see as such. There’s also the literal restructuring of a business moving location that needs to be looked at or if certain positions within the company are changing. In these, and any circumstance, having a lawyer at hand is going to make things easier.

Knowing when insolvency is the way to go

It can quite rightly feel like a bitter pill to swallow to declare as such, but insolvency should never come as a shock if you know some of the common signs. Aspects like creditors requiring special arrangements, a continual level of seasons (as opposed to seasonal), issues selling stock & suppliers only working on a cash forward basis are all signs that a business may be viewed as reaching or in insolvency. That’s outside of looking at the industry a business is based in and external issues unaccounted for.


Financial Trouble? An Insolvency Practitioner Might Help!


While it may be pretty to see, insolvency is a necessary practice and one which must be carried out with due diligence. To find out more on the topic, I recommend reading about how dedicated insolvency lawyers can help a business. With a focus on one discipline, their expertise is going to be much more useful than general advice.

Remember; restructuring and insolvency are not terms to be fearful of. By understanding and leaning on them, you can have an easier time handling affairs.

Image Source: Shutterstock.com

Filed Under: Featured Posts, Finance, Legal Tagged With: Featured Article, Financial advice, lawyer, legal, legal services

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Disclosure

We earn commissions if you shop through the links on this page.

Recent Posts

  • The Benefits of Outsourcing Your Business Event Planning
  • Testimonial Advertising: Best Ways to Use It
  • How to Start a Commercial Kitchen Rental Business: A Comprehensive Guide
  • Leveraging Microsoft Dynamics for Small Business Growth and Scalability
  • The Future of ERP Consultants for Small Businesses: Discussing Emerging Trends and Advancements

Categories

Archives

Make Money Online – Free Course

  • Discover All The Shortcuts To Affiliate Marketing Success
  • Find Out How To Fill Your Site With New Leads And Customers
  • Discover How To Turn Your Passion Into Profits
  • Learn How To Write Copy That Gets Results Fast!
  • Discover How To Create Promote & Sell Your Own Products Online
  • Everything You Need To Know About Marketing Money Online
  • Strategies For Successful Web Entrepreneurs Inside
  • Discover How To Invest Smarter Grow Faster And Retire Rich
  • Email Marketing Strategies For Marketers And Entrepreneurs
  • Free training reveals how to build a successful six figure income online
  • Discover The Mindset Hacks You Need To Succeed
  • Free Marketing Memberships – Make Money Online

    Make money online free marketing memberships

    Tags

    Accounting apps bitcoin brand business growth business skills business success communication cryptocurrency Customer Service Data design Digital marketing ecommerce Efficiency employees Featured Article finance finances Health and Safety infographic insurance Investing investment legal legal tips Management Marketing marketing strategy Outsourcing productivity property Real estate sales security SEO Social Media software starting a business startup Technology Trading Training website workplace

    Disclosure

    We earn commissions if you shop through the links on this page.

    Digital Marketing Agency

    ReachMore Banner

    Business Partner Magazine

    Business Partner Magazine provides business tips for small business owners (SME). We are your business partner helping you on your road to business success.

    Have a look around the site to discover a wealth of business-focused content.

    Here’s to your business success!

    Copyright © 2023 - Business Partner Magazine·

    x
    x