To have a meaningful discussion and put a plan in place, it helps to have the important information ahead of time. This allows us to give you a steer on your options and advise on what will likely get the best outcome for stakeholders.
So, what do we look for and why?
- Creditor List
To understand the level of company debt and the class of each creditor. If there are secured creditors, we’ll want to know what assets they may be entitled to under a General Security Agreement (GSA) or Purchase Money Security Interest (PMSI), and whether any assets need to be returned to suppliers with valid claims. If we look to trade the business on it is important to know which suppliers may be key relationships that are not easily substituted and will need their buy in for any ongoing trading prospect. - Account Application Folder
Beyond identifying creditors, reviewing account applications helps us spot any personal guarantees that may survive liquidation. These will need to be dealt with by the guarantor in their personal capacity. - Asset Register
What assets does the company own? This is key to understanding what we’ll be dealing with during the appointment and whether those assets are recoverable. If there are no recoverable assets, an upfront fee may be required to proceed with the insolvency appointment. Are any of these assets surplus to requirements that may be realized to free up some quick cash for the business and get it through a lumpy period. - Bad Debts List
Have any debtors been written off? If so, why? Are they recoverable? If the company accounts on an invoice basis for GST, there may be a refund due as a result of the write-off. - Debtors List
What debts are currently outstanding? Are they supported by sufficient documentation? Are they recoverable and is this overstated I the financial statements? What is the average debtor days, can this be brought down to get in some cash to help working capital fluxuations. - Employee Arrears
What wages, holiday pay, or other entitlements are owed to staff? If we’re considering trading on, we’ll need a plan to address arrears otherwise, staff may walk off on Day 1. - Lease Agreement
If the company leases premises, we’ll need to know how long is left on the lease, whether there’s a bank bond or personal guarantee, and which onsite assets are landlord owned chattels (as detailed in the lease). Is the landlord supportive of the business being traded on if their ongoing costs are met and will they consider a new owner coming in and entering into a new lease for the site. - Financial Statements
Do the documents above align with the financial statements? If not, why? Financial statements are typically prepared by the company’s accountant, while the other documents are often sourced directly by directors/shareholders with minimal oversight. - Latest Management Accounts
While financial statements reflect the last financial year, management accounts give us a current snapshot of the company’s position. - Company Constitution / Shareholder Agreements
Do these exist, or are we just working with what’s in the Companies Act 1993? A company constitution or shareholder agreement often includes clauses that change the voting thresholds for special resolutions or outline the process required to place the company into liquidation or take other formal steps. These documents help clarify who has decision-making authority and what procedures need to be followed, especially when stakeholders aren’t aligned.
This list isn’t exhaustive. Depending on the asset types and complexity of the situation, further documents will likely be required once the engagement begins.