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The UK economy continues to face a multitude of challenges. Political uncertainty and a fast-evolving economy cause turbulence and cash flow pressures.  Accountants have a key role in diagnosing issues and advising when a business faces decline.  Experience confirms that: - 

• The sooner the potential risk of insolvency is detected; then 
• The wider the remedial options; and thus
• The improved prospects of optimum outcome, which can mean preserving all or part of a business, 

In that context, accountants are trusted and experienced advisers.  An accountant is often the first call for any director when business declines.  The right advice – including when to consult other professionals – can mean retaining the client. 

This course will aid accountants in identifying factors, which can lead to business failure.   and help you spot the early warning signs. 

In this course Howard Roberts covers the following topics:

1. Identifying types of Insolvency and timing: 

• Differentiating between cash-flow and balance-sheet insolvency is vital for identifying financial distress early – s.123 Insolvency Act 1986 (IA86).  
• Analysis of types of creditor claims and pressure - key in measuring available options. 

2. Types of Proceedings: Understanding formal insolvency procedures is vital as each impacts how assets are managed, claims pursued and outcomes for creditors: -

• Administration. 
• Company Voluntary Arrangements (CVAs), 
• Three types of Liquidation – to include Provisional Liquidation.
• Company Directors’ Disqualification Act 1986 (CDDA 86)
• Restructuring and turnaround plans

3. Analysis of potential claims arising against accountants/directors/officers under the IA86 and CDDA 86: -

• Negligence 
• Misfeasance – including duty to maintain records, excessive remuneration, unlawful dividends and overdrawn director loan accounts 
• Preference, transactions at undervalue
• Wrongful and fraudulent trading
• Defences from statute and caselaw– Re. Duomatic and others

4. Priorities for Distribution: hierarchy of creditors: -

• secured, 
• preferential, 
• unsecured 
• ensure equitable distribution of funds.