Top tips for directors of companies in distress

1. Take advice early

The choice of support and options available is maximised.

E.g. seeking advice where there is a shortfall of cash in 3 months provides a greater ability to obtain finance or restructure than calling us the day before payroll is due.

2. Remuneration – PAYE or dividends

• Ensuring that directors pay themselves in the right way is critical.

• The board may be unable to declare dividends at year end and therefore risk overdrawn directors’ loans.

3. Investing funds with less risk

• If trading on and investing further, consider how best to secure that investment.

In the right circumstances the board could consider purchasing assets from the company with or without security.

4. Take detailed notes

• It is imperative that the directors take detailed notes supporting critical business decisions.