Options & Solutions Guide for Partnerships Financially Struggling

Before the Punks outline the guide for partnership options, it is important to define what we mean. Partnership options often refer to the financial and logistical solutions available for a board of directors. Depending on the stake the directors hold in a company, they may also refer to shareholders too. Unlike personal or company options, they analyse the decisions made at the top of an enterprise by the collective partners. Because of this, partnership options are often applied to companies that have two or more directors involved in running a company. If you are a sole trader or run a business model independently, you may want to check our guide on personal options. However, if you are part of a collective board of directors, then read on. What are some of the partnership options that can help a business clear its debts?

In the process of negotiations, the board of directors play a key in securing agreements. No matter who the negotiations are with, they are a fundamental way of reducing a company’s total debt. If partners need to talk directly with the creditors, then it may be possible to negotiate a Company Voluntary Arrangement (CVA). With the reorganisation of debt, a CVA will give a company extensive time to pay the debt, and they usually last between three to five years. At least 75% of creditors must agree to a CVA for it to be finalised.

If a board of directors have been issued with a winding-up order or a petition from a county council, then they may need to enter into negotiations with the respective legal body. However, even with the issuing of a winding-up order, it is not too late to negotiate terms with the respective creditors. A company or director can apply to cancel a winding-up order if they deem it to be unsuitable for paying the creditors. This must be done within five working days of the order being issued.

If a debt has accrued through tax, then a company must conduct negotiations with the HMRC. During these negotiations, the business will seek a Time to Pay arrangement (TTP). If a company can successfully obtain a TTP, it will have an additional 12 months to pay off a debt, and the debt payments will be organised so that they can be sustained over the agreement. VAT bills are often the most common form of tax arrears, and this is a direct solution to that issue.

If negotiations are successful, then a board of directors can begin to reorganise their finances. One major sign of impending insolvency is the default on dividend and pension payment plans. With successful negotiations and the sustainable payment of a debt, these payment plan issues can be rectified. It is incredibly important for a board of directors to have a good relationship with the shareholders of a company, as they are the ones who invest in the growth of the company. In addition, both dividends and pension payment plans are viable ways of reducing a business’s corporation tax.

If the board of directors need help from an external practitioner, then they may want to consider administration. In the process of administration, the total debt will be analysed, as will the methods by which it can be paid back. They may also look at the business model and the existing shareholders. If they decide that the assets can be sold to rescue a company, they will begin to organise a sale of them to existing shareholders or those who register new interest in the company. This is known as a pre-pack administration.

In the process of a pre-pack administration, the board of directors may face a degree of uncertainty regarding their positions. However, during a pre-pack sale, the skeleton of a business is protected. The value, branding, commercial outlook, and staff are all retained. The Boardroom Punks understand the risks at play when a pre-pack sale may be negotiated, yet we will assure a board of directors that all new commercial interest in the assets is pursued with the company’s interests in mind. Transparency is often one of the biggest criticisms that surround pre-pack administration, and so we want to make sure we deal with this issue from the very beginning.

Other partnership options include financial options like fixed loans, cash flow analysis, and logistical solutions. For a board of directors, cash flow analysis and external advice may seem excessive, but it is done to protect the business in the long term. The Boardroom Punks want to work alongside a business and apply their innovative solutions with the full knowledge of the existing board members.

If you are a director of a company or are on the board of directors, then do not hesitate to get in contact. We know how hard you work to keep the business running, and our additional support will allow you to keep up the progress of the business. Our partnership options are designed to clear any outstanding debt sustainably. With a consultation and a thorough analysis of the business model together, we believe we can apply our solutions in the right areas.

Even with the help offered in this guide, your problem may be too specific to rely upon this advice alone. The Boardroom Punks understand the intricacies of business as we are a team of business-savvy professionals who take their trade seriously. If you do require further help, then feel free to book a call today. All inquiries are confidential, and you can be assured that we will approach your problem with respect and dignity. Our alternative solutions are always geared toward saving a business rather than insolvency or liquidation. The Punks have your back!