Should You Ever Consider Restarting Your Company?

50% of businesses won’t survive past 3 years

It’s no shock that for every four companies that start-up within the first year, one will have closed. Within the first three years 2 will have closed. That’s a 50% chance that a new business will survive past its third year, not a great prospect when it’s your livelihood on the line.

There are of course plenty of indicators such as the insolvency 3-point checklist which can help a business owner recognise when a business is starting to have problems, but what happens when those problems pop up?

There is plenty of information around about how to approach problems in a positive way, but let’s assume the worst case scenario, your business is faced by un-payable bills, your finances are deeply in the red, what happens next?

If your business is the only income you have then outright closure will be the worst possible outcome, but there is a solution.

One of the main things we like you to be aware of is that it is very easy to just open up for business again, but if you don’t have a business map in place then you could just end up where you started. You need to look into elements you might have missed the first time, long and short term goals and how your product or service is going to affect your customers.

Restarting a limited company

By closing your failing company, you can continue to trade within a new business, even possibly beginning the new business with assets of the old, bought for the new business at more affordable costs.

Company Restarts, also known as business restructuring, (similarly to pre-pack administrations) can help overcome start-up and business failures but they have to be handled in a specific way, and in accordance to the legal-boundaries which govern all businesses.

By trading on within a new company you could possibly;

• retain staff, ensuring the new business has the skills to get going.
• release yourself from bad debts.
• rid yourself obligation of bad contracts.
• retain loyal customers ensuring future income
• retain brand awareness, reduces the costs of ‘start-up’ for the new company.

However, without the procedure being followed correctly, directors may become personally liable for the indebtedness of the company and you may face a fine and possible prosecution.

When creating your new plan, it is so important that you remain positive. Having the right mindset can have a massive impact on the look of your new business plan, make sure you take plenty of time to plan and consult with an advisor to ensure you are looking at it the right way.

Read – Can I Close a Limited Company with Debts and Start Again?

The law has to be complied with

This is of course not a way to simply illegally remove unfavourable conditions, the laws for closure and company formation all still have to be complied with.

It is however a good way of ensuring that you can continue trading, continue earning an income and ensure that you as a business owner aren’t put into a situation which if unchecked could lead as far as court imposed fines or even criminal enquiry.

If your business is struggling to trade in it’s current form, but you cannot bear the thought of closure due to loss of income, why not consider investigating Business Restructuring (Restarting), it could save you thousands of pounds in debt-fee’s and running costs, and in the long term ensure your business flourishes and grows to return even higher income for yourself and anyone you employ.

Not sure what to do? We are here to help

If your company is struggling with unmanageable HMRC debts, poor cash flow, or an uncertain future, you are not alone.

We speak to company directors struggling with the same issues as you every single day, and we are here to give you the help and guidance you need.

Call our team for free, no-obligation advice today on 0800 975 0380 or book a free consultation