You may be considering
sole trader administration but have you also considered the other options
which are still open to you?
The term sole trader
administration is not a legal term at all but may be applied to a situation
in which a sole trader puts his or her business into administration
because of crippling cash flow or an unforeseen (or even historic) debt
Sole traders have
a number of options when facing the prospect of winding up the business
due to insolvency, not least of which is writing off the bad debts of
the business by taking out an IVA (Individual Voluntary Arrangement)
and then creating a new entity like a partnership or a limited company
which continues to trade as a viable business, thus ensuring a continuing
income for the business owner, and also work for any existing employees,
A clear distinction
should be made about what belongs to the business and what belongs to
the individual who owns the business. A “sole trader administration”
would need to take into account what assets were available to the business
as well as the liabilities to the business and the individual who owned
The solution may
be to wind up the business and start afresh. There are a number of possibilities
which would be available, including refinancing and a restructuring
of the business to drastically reduce costs and overheads, getting rid
of onerous leases and contracts, and in other ways making sure that
the new business entity runs in a more lean and efficient manner.
If you would like
to talk about sole trader administration to a specialist with 17 years
corporate insolvency experience then enter your details into the web
form below for a no-obligation chat.
if you need help with personal debt (rather than business related debt)
go to our free debt
management plan application form.
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