When a company requires corporate recovery advice or enters the insolvency process, it shouldn’t necessarily mean the end of the business. In many instances, the company remains viable and could be saved through a process of restructuring.
However, these businesses are often forced to close because they can’t guarantee a service from utility or IT suppliers. New proposals launched by the government are aimed at solving this issue.
Jo Swinson, the Business Minister, recently launched proposals that will see insolvent businesses provided with more support from IT and utility providers. The consultation will look at what measures can be established to provide the essential services to insolvent businesses when they are going through the recovery process. This will mean that the suppliers have to carry on providing the businesses with a service. However, there will be plans in place to ensure the supplier is protected and won’t lose out financially.
Currently, they may face termination of contracts and higher charges and be required to pay off their existing debts with the supplier in order to continue receiving a service. This can end up being the final element that forces the closure of a business, as they are unable to continue operating without services such as internet access and an electricity supply. Often businesses remain viable, but as no one is willing to supply the business, they have to shut down.
The new plans will help those companies that provide corporate recovery advice, as well as insolvency practitioners and creditors. As they work together to try to secure the future of the business, they won’t be hit with supplier difficulties. Those within the industry believe that the plans could result in more than 2,000 businesses being saved every year. This will be good news for employees and provide support for the economic recovery.
The government will now gather the views of all the parties involved in the insolvency process. This will ensure that the changes work for all organisations concerned.
At tri group we have an excellent history of providing businesses of all shapes and sizes with corporate recovery advice. If you are in need of our services, then speak to one of our expert team who will be able to offer tailored advice.