Jameson Smith & Co Ltd

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Tuesday, 8 October 2013

Who takes care of who when a business is insolvent?

When a company becomes insolvent the directors must take great care to fully address their duties and responsibilities; even more so than usual, as they will be watched very closely if they require an insolvency practitioner step in and process an insolvency solution for them.

Why is this? Simply put, as soon as an insolvency practitioner is engaged as a liquidator their main duty is to the creditors not the directors so your personal interests are not looked after by the liquidator once they have been engaged. For example increasing the overdraft within the normal day to day running of the business  would not be an issue, but what happens if matters start to go wrong? You may require personal help during the liquidation process and often afterwards. So who do you turn to if you can't go to the liquidator, surely they are there to advise you? Normally, you would need to engage an external consultant to advise you personally while the liquidator does his/her job. This is not the case with Jameson Smith & Co.

t Jameson Smith & Co we work very closely with you throughout the liquidation process and afterwards if required to help make sure that everything on your side runs smoothly and that you are protected personally as much as is possible. So the liquidator has a duty to the creditors (people your business owes money to) whilst having due care for the  directors and Jameson Smith & Co has a duty to the directors with due-care to the creditors. Who would you rather have on your side? This is not meant as a slight on the liquidator quite the contrary they have a job to do and we find that this brings a far more equitable solution and everyone is tended to and taken care of.