Running a pub and making a profit is tough. When it gets too difficult and the business debts are getting out of hand, it is time to get professional advice to see what your best options are.
This is what the pub owners did in this case…
The pub was based in the South of England, near London, and owned by two directors. They had incorporate the business into a limited company. This was a good decision, as it meant their liabilities were limited and the option of a Creditors’ Voluntary Liquidation (CVL) was available to them.
The directors had invested funds into the business from the outset in order to assist general cash flow. The company employed one member of staff and relied upon word of mouth and footfall in order to generate trade. This proved successful initially.
After about a year of trading, new food establishments opened in the area. These resulted in a reduction in the number of customers to the pub. As a result, turnover declined.
The directors increased their marketing efforts using social media and newspaper advertising. Whilst this had some positive effects on trade, it was not as much as the business needed. Consequently, the directors injected their own personal funds into the company to meet the general running costs.
However, after a few months the situation wasn’t improving so the directors decided to seek professional advice to see what their options were. They looked on the Internet to see who could best help them and found Clarke Bell’s details.
Clarke Bell is based in Manchester and provides a nationwide service. So, we were to help the directors, even though the company was based near London.
We discussed the company’s situation with the directors. (Our service always includes free advice.) The company had assets of about £1,000 worth of office equipment. The main liabilities were approx. £13,000 to HMRC for unpaid VAT and £16,000 owed to trade creditors (including the Council).
It was decided that the best option would be for the company to enter a Creditors’ Voluntary Liquidation (CVL) – for which the fee was £1,995 (all inclusive).
Many Insolvency Practitioners charge much more for dealing with a case like this. However, it is Clarke Bell’s belief that CVLs of this type (which we call ‘Basic CVLs’) are relatively simple, so the fee should be affordable to enable company owners to deal with their business debts and fulfil their legal obligations.
If you are the owner of a pub which is having problems due to business debts, contact us now (for your free advice) on 0161 907 4044 or [email protected]