The onset of the Credit Crunch caused a temporary relaxing of HMRC's enforcement proceedings.The long term effect is a general acceptance that small businesses require greater assistance and support.

Attitude to corporate failure has also changed. It is no longer seen as the end of business. In recent years, there have been a number of successful High Street administrations producing are financially secure, slimmed-down companies, more capable of surviving increasingly difficult financial conditions.

A pre-pack sale od assets can be a very effective tool to save the business, but not necessarily the company. The business assets including good will, are usually solid with little or no open marketing other than discussions with any secured creditor and the company's major creditor(s). There are guidelines contained within SIP 16 setting out when this process is appropriate and ensuring that the Insolvency Practitioner has a responsibility to report such a sale to the creditors quickly, providing a full explanation as to the reasons such a process was deemed necessary.

Rescue via an administration process ia only possible if there is an underlying, potentially profitable business. The task of raising new finance can be improved post an administration process, as the new business is free from the old and contingent liabilities.

It is important for company directors to seek professional advice at the earliest signs of difficulty to maximise the potential options available, which may not involve a formal insolvency procedure.

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