The Essential Guide For Directors In Financial Difficulty

After two weary years of recession, if you are still running your business successfully, well done because I bet it hasn't been easy! They say that "when the going gets tough, the tough get going" and this is never more true as we steer our businesses through the difficult times. For many of us orders are down, costs up, staff are facing redundancy, and cash flow and supplier credit is difficult to manage. Tempting though it is, this is no time to hide under the duvet and hope it will all go away.

Help and Advice

So, as a director of a business, how do you survive this harsh climate and get the best help and advice when it is needed? Well, a little known group of professionals known as turnaround managers or corporate restructurers specialise in helping shareholders and directors of troubled businesses to survive in preparation for growth. They do this by stabilising the cash situation and dealing with creditors, and then if necessary restructuring the business to move forward into new growth. Most take a team approach with legal, accounting, marketing and insolvency professionals to assist the board. The essential knowledge of the regulations is key to steering a business through difficult times. Don't put your head in the sand, you must be proactive to survive and make yourself fully aware of the regulations and duties on a director. To help you do just this on such Turnaround Practice, K2 Business Rescue, have produced a reference guide called "A Practical Guide for Directors, Executives and Advisors". The Guide gives a clear outline of the main duties and responsibilities of directors in troubled businesses with a strong emphasis on survival it is available free on their website www.rescue.co.uk.

Accountability and Liability - know the rules

The Guide outlines the duties and responsibilities of a director and company secretary and provides notes on the legislation that you need to abide by. It is vital for advisors and non-executive directors to understand that in the eyes of the law they are equally responsible as executive directors if the company should get into financial difficulty? Did you also know that executives and advisers can also be held to be directors when the company gets into financial difficulties?

Did you know that all directors are now bound by a set of seven 'codified duties', as set out by the Companies Act 2006 that came into effect in 2008? Failure to comply with your duties can result in you as a director incurring personal liability, both civil and criminal and disqualification for up to 15 years. The Insolvency Act 1986 is very clear that directors of insolvent companies are required to act in the best interests of creditors. Properly advised, directors can avoid personal liability by demonstrating they have acted properly.

Is Your Company Actually Insolvent?

This Guide also covers relevant aspects of the Directors Disqualification Act 1986 and the Insolvency Act 1986, and details the four primary tests to determine whether your company is insolvent, which can be the case even if you still have a strong balance sheet.

It is legal to trade whilst insolvent in certain circumstances where it is in the best interests of creditors. However I would only advise this is done with the support of a solicitor with experience of insolvency or a licensed insolvency practitioner, as these experts offer your best protection against becoming personally liable for your company's debts. The Guide should help you establish your objectives and offers guidelines in the form of continuance principles if you do decide to trade while insolvent.

Act Now

As a director you can risk everything you have if you fail to seek advice when things get sticky. Your existing bankers, accountants and other advisers are likely to be creditors with their own agenda, whereas help from independent advisers like K2 Business Rescue will put you and your company's interests first. So don't leave it too late, contact a qualified advisor today for some advice. At least get a free copy of the Guide and take some of the worry out of being a director in these difficult financial times.

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<!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'> <html><head><title>Article Storehouse | The Essential Guide For Directors In Financial Difficulty</title></head><body><h3>The Essential Guide For Directors In Financial Difficulty</h3><br><br> By: Tim Meadows Smith<br><br><p><p>After two weary years of recession, if you are still running your business successfully, well done because I bet it hasn't been easy! They say that "when the going gets tough, the tough get going" and this is never more true as we steer our businesses through the difficult times. For many of us orders are down, costs up, staff are facing redundancy, and cash flow and supplier credit is difficult to manage. Tempting though it is, this is no time to hide under the duvet and hope it will all go away.</P><p>Help and Advice</P><p>So, as a director of a business, how do you survive this harsh climate and get the best help and advice when it is needed? Well, a little known group of professionals known as turnaround managers or corporate restructurers specialise in helping shareholders and directors of troubled businesses to survive in preparation for growth. They do this by stabilising the cash situation and dealing with creditors, and then if necessary restructuring the business to move forward into new growth. Most take a team approach with legal, accounting, marketing and insolvency professionals to assist the board. The essential knowledge of the regulations is key to steering a business through difficult times. Don't put your head in the sand, you must be proactive to survive and make yourself fully aware of the regulations and duties on a director. To help you do just this on such Turnaround Practice, K2 Business Rescue, have produced a reference guide called "A Practical Guide for Directors, Executives and Advisors". The Guide gives a clear outline of the main duties and responsibilities of directors in troubled businesses with a strong emphasis on survival it is available free on their website <A href="http://www.rescue.co.uk/">www.rescue.co.uk</A>.</P><p>Accountability and Liability - know the rules</P><p>The Guide outlines the duties and responsibilities of a director and company secretary and provides notes on the legislation that you need to abide by. It is vital for advisors and non-executive directors to understand that in the eyes of the law they are equally responsible as executive directors if the company should get into financial difficulty? Did you also know that executives and advisers can also be held to be directors when the company gets into financial difficulties?</P><p>Did you know that all directors are now bound by a set of seven 'codified duties', as set out by the Companies Act 2006 that came into effect in 2008? Failure to comply with your duties can result in you as a director incurring personal liability, both civil and criminal and disqualification for up to 15 years. The Insolvency Act 1986 is very clear that directors of insolvent companies are required to act in the best interests of creditors. Properly advised, directors can avoid personal liability by demonstrating they have acted properly.</P><p>Is Your Company Actually Insolvent?</P><p>This Guide also covers relevant aspects of the Directors Disqualification Act 1986 and the Insolvency Act 1986, and details the four primary tests to determine whether your company is insolvent, which can be the case even if you still have a strong balance sheet.</P><p>It is legal to trade whilst insolvent in certain circumstances where it is in the best interests of creditors. However I would only advise this is done with the support of a solicitor with experience of insolvency or a licensed insolvency practitioner, as these experts offer your best protection against becoming personally liable for your company's debts. The Guide should help you establish your objectives and offers guidelines in the form of continuance principles if you do decide to trade while insolvent.</P><p>Act Now</P><p>As a director you can risk everything you have if you fail to seek advice when things get sticky. Your existing bankers, accountants and other advisers are likely to be creditors with their own agenda, whereas help from independent advisers like K2 Business Rescue will put you and your company's interests first. So don't leave it too late, contact a qualified advisor today for some advice. At least get a free copy of the Guide and take some of the worry out of being a director in these difficult financial times.<br></P></p> <br><br> <b>Author Resource:-></b>  About the author <a href="http://www.rescue.co.uk/team.shtml">Tim Meadows-Smith</a> is an experienced non-executive chairman, director and business advisor, from a classical sales and marketing background gained with famous global FMCG brand owners. He has hands on turnaround experience and speaks about <a href="http://www.rescue.co.uk/directorsguide.shtml">business turnaround management </a>in a way business people can understand.<br><br><b>Article From</b> <a href='http://articlestorehouse.com/'>Article Storehouse</a><br></body></html>