Overview
This commercial plumbing company had been successful in building a local customer base and happy workforce of 5 staff. However, over time, the financial and administration side of the business had been neglected and had grown into a stressful ticking time-bomb for the company director.
When we met with the director, the company was facing a huge £134,000 debt with the HMRC and was close to facing compulsory liquidation by order of the court.
It was clear the director still held a passion for his business; we worked to find a way to save this company from compulsory liquidation and successfully achieved this without any impact on its staff or customers.
About the company
Delivering a strong service, this commercial plumbing company was popular in its local community and had built a good customer base as a result. As the business had grown, so too had the staff force with 5 committed employees working under the guidance of a strong director.
The challenge
While the service delivery was strong and the customers were happy, behind the scenes the director was struggling to keep financial affairs in line.
A huge HMRC debt had accumulated to the sum of £134,000 and the company was facing compulsory liquidation.
Nevertheless, the director was not ready to give up; he wanted to save his company, look after his staff, and secure his customer base in any way possible.
“We needed to act quickly – we liaised with the HMRC, made them aware of our intentions, and got them on-side.”
– Emma, Case Manager
How we helped
The best solution soon became apparent; we would set up a new company to purchase the existing company’s assets including vehicles and tools when the old company was liquidated. By doing this, the new company was able to pick up where the old company had left off and continue trade with no disruption to their customers.
We took the daunting aspect of dealing with the HMRC out of the hands of the director; we spoke to them and made sure they were fully aware of our intentions and managed to secure their support in the process.
We then moved the company into a Creditors Voluntary Liquidation which meant that we were able to avoid the compulsory liquidation proceedings.
“We worked with the director of the new company to put some financial processes in place and introduced them to some online accounting software so they could begin to see in real-time what was outstanding and overdue, and avoid building up massive debts again.”
– Emma, Case Manager
The result
The new company is continuing to be as successful as the original, with the addition of new efficient financial and administration processes running in the background.
The staff were well looked after throughout the process and migrated with a TUPE transfer over to the new company.
“It’s very satisfying to save a single job so when we could save 5, I was very happy. The new company is running well and returning a healthy profit whilst the director is now a lot less stressed.”
– Emma, Case Manager
Facing a similar situation?
If your company is in a situation like this or is in any other type of difficulty we can help. Call us on 0800 975 0380 for some free and confidential advice on what you can do or you can visit our Business Recovery page.
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