1. Never ignore early warning signs such as lack of working capital.

2. Begin to assess cash flow on a day to day basis.

3. Record all transactions and review regularly.

4. Avoid taking on further loans.

5. Only place more orders if you are sure the company can pay for them.

6. Ensure that a reasonable market value is obtained for any assets you decide to sell.

7. Continue to pay official taxes on time.

8. Do not delay submitting official returns and accounts to Companies House and the Inland Revenue.

9. Seek regular advice from experts like your accountant, the bank and recovery advisors.

10. If the crisis deepens, be prepared to make the decision that the company will cease trading, as you may be liable for wrongful trading if you continue.

11. Follow any expert advice given, such as placing your company into a Company Voluntary Arrangement (CVA) as this gives a chance to negotiate with creditors.

12. Consider the alternative strategy of applying to the High Court to place the company in Administration which protects the company from creditors while rescue plans are drawn up.

Do’s and Don’ts

Do:

Monitor the situation on a day to day basis.

Discuss problems at an early stage with your accountant.

Comply with any legal requirements.

Be prepared to try radical rescue methods

Don’t:

Ignore problems – they may not go away.

Commit the company to more borrowing.

Continue to trade once it is clear the company cannot avoid insolvency.