HOW TO GET YOUR COMPANY BACK ON TRACK

Right now many companies in Ireland could be classified as insolvent. As cashflows are disrupted by slow paying customers and as bad debts stack up, business owners who find their company in an insolvent position often wonder what the next steps are.

 

Firstly, don’t panic – after all, if you’re confident that your company can trade its way back into a profitable position (which it can in a lot of cases) then you’ll be fine. It’s in nobody’s interest for a company to fold just because there are cash flow issues, least of all the company’s creditors.

 

However, many business owners lose sleep when their company is in the red. The monthly wage bill and the day-to-day operating costs have to take priority to keep the company going but the real acid test of whether or not you can get back to a solvent position is by taking a close look at your balance sheet at the end of each year.

 

If your company’s performance is improving in terms of reducing the level of losses or if profitability is increasing on a gradual scale over a period of say three years, then you can continue trading and at that point, it will generally be agreed that the company and the company’s creditors are of the opinion that the company is returning to a solvent position.

 

Considering options

On the other hand, if there is really no way of knowing whether or not the company can get back in the black, the directors must consider a number of options. The first is whether or not to put the company into liquidation. It is the responsibility of the directors to be honest here and acknowledge the true financial position of the company. Delaying the liquidation process can have, after all, grave consequences – reckless trading being the most serious.

 

There are three types of liquidation. The first is a voluntary liquidation whereby the owners of the company are in a position to wind-up the company themselves. This can only arise in a situation where the company is solvent in the first place though. In other words, the directors should know that if they cash in their overall assets, the money they receive will be sufficient to cover any liabilities that exist within the company.

 

The second and most common type of liquidation is a creditor’s liquidation. This is where the directors realise that they are in an insolvent position. Under company legislation, they are obliged to hold a creditor’s liquidation if they are of the opinion that they will not be able to trade out of their troubles and return the company to a solvent position.

 

The third type of liquidation is a compulsory liquidation, where by a petition has been presented by a creditor to the courts under section 2.3.1 of the Companies Act 1963 to wind up a company and sell off its assets in order to receive outstanding payments in full.

 

How we can help

If you find your company is in financial trouble, the first thing your accountant or business advisors should do is take a look at the state of the company’s finances and restructure where appropriate and possible.  At DCA Accountants and Business Advisors, we often start with the company’s costs and see if there is any room for reducing outgoings. In many cases there will be. It is also important to ensure that the company in question is maximising the resources at its disposal.

 

Once the internal process is complete, creditors need to be informed of the situation – the company’s primary aim, which we always advocate at DCA Accountant and Business Advisors, should be to try to trade back into profitability. To do that takes time and creditors need to be made fully aware of the restructuring process and payment plans that have been put in place.

 

If there is really no other course of action left having explored all possible avenues to keep the company in business, liquidation may be the only option. If that’s the road that you have to go down, it is imperative to ensure that the entire process is carried out as efficiently – from a professional and financial point of view – as possible.

 

Declan Dolan,

Partner,

DCA Accountants and Business Advisors

 

For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie

MONTHLY RETURN DEADLINES FOR MAY 2011

14/05/11 – PAYE/PRSI: P30 monthly return and payment for April 2011

14/05/11 – DWT: Return and payment of DWT for April 2011

14/05/11 – PSWT: F30 monthly return and payment for April 2011

14/05/11 – RCT: RCT30 monthly return and payment for April 2011

19/05/11 – VAT: VAT 3 return and payment for period March/April 2011
19/05/11 – VAT: 4 Monthly VAT 3 return and payment (if due) for period January/April 2011

1-21/05/11 – Corporation Tax: PT for APs ending between 1-30 June 2011
1-21/05/11 – Corporation Tax: Returns for APs ending between 1-31 August 2010
1-21/05/11 – Corporation Tax: Pay balance due on APs ending between 1-31 August 2010
1-31/05/11 – Corporation Tax: Returns of Third Party Information for APs ending between 1-31 August 2010

MONTHLY RETURN DEADLINES FOR APRIL 2011

14/04/11 – PAYE/PRSI: P30 monthly return and payment for March 2011
14/04/11 – PAYE/PRSI: P30 quarterly return and payment for January/March 2011

14/04/11 – DWT: Return and payment of DWT for March 2011

14/04/11 – PSWT: F30 monthly return and payment for March 2011

14/04/11 – RCT: RCT30 monthly return and payment for March 2011

1-21/04/11 – Corporation Tax: PT for APs ending between 1-31 May 2011
1-21/04/11 – Corporation Tax: Returns for APs ending between 1-31 July 2010
1-21/04/11 – Corporation Tax: Pay balance due on APs ending between 1-31 July 2010
1-30/04/11 – Corporation Tax: Returns of Third Party Information for APs ending between 1-31 July 2010

MONTHLY RETURN DEADLINES FOR MARCH 2011

PAYE/PRSI:
14/03/2011 – P30 monthly return and payment for February 2011

DWT:
14/03/2011 – Return and payment of DWT for February 2011

PSWT:
14/03/2011 – F30 monthly return and payment for February 2011

RCT:
14/03/2011 – RCT 30 monthly return and payment for February 2011

VAT:
19/03/2011 – Bi-Monthly VAT 3 return and payment (if due) for period January/February 2011

Corporation Tax:
1-21/03/2011 – PT for APs ending between 1-30 April 2011
1-21/03/2011 – Returns for APs ending between 1-30 June 2010
1-21/03/2011 – Pay Balance due on APs ending between 1-30 June 2010
1-31/03/2011 – Returns of Third Party Information for APs ending between 1-30 June 2010

Income Tax:
31/03/2011 – Return of Share Options and other Rights for 2010
31/03/2011 – Deadline for claiming Separate Assessment for 2011
31/03/2011 – Deadline for nominating Assessable Spouse for 2011

MONTHLY RETURN DEADLINES FOR FEBRUARY 2011

PAYE/PRSI:
14/02/2011 – P30 monthly return and payment for January 2011

DWT:
14/02/2011 – Return and payment of DWT for January 2011

PSWT:
14/02/2011 – F30 monthly return and payment for January 2011

RCT:
14/02/2011 – RCT 30 monthly return and payment for January 2011

PSWT:
15/02/2011 – F35 annual return for year ended 31 December 2010

RCT:
15/02/2011 – RCT 35 return for year ended 31 December 2010

PAYE/PRSI:
15/02/2011 – Issue P60 2010, to each employee
15/02/2011 – Due date submission of Form P35 for year ended 31 December 2010

Corporation Tax:
1-21/02/2011 – PT for APs ending between 1-31 March 2011
1-21/02/2011 – Returns for APs ending between 1-31 May 2010
1-21/02/2011 – Pay Balance due on APs ending between 1-31 May 2010
1-28/02/2011 – Returns of Third Party Information for APs ending between 1-31 May 2010

MONTHLY RETURN DEADLINES FOR JANUARY 2011

PAYE/PRSI:
14/01/2011 – P30 monthly return and payment for December 2010
14/01/2011 – P30 quarterly return and payment for October/December 2010

DWT:
14/01/2011 – Return and payment of DWT for December 2010

PSWT:
14/01/2011 – F30 monthly return and payment for December 2010

RCT:
14/01/2011 – RCT 30 monthly return and payment for December 2010

VAT:
19/01/2011 – Bi-Monthly VAT 3 return and payment (if due) for period November/December 2010
19/01/2011 – Bi-Annual VAT 3 return and payment (if due) for period July/December 2010
19/01/2011 – 4 Monthly VAT 3 return and payment (if due) for period September/December 2010

Corporation Tax:
1-21/01/2011 – PT for APs ending between 1-28 February 2011
1-21/01/2011 – Returns for APs ending between 1-30 April 2010
1-21/01/2011 – Pay Balance due on APs ending between 1-30 April 2010
1-31/01/2011 – Returns of Third Party Information for APs ending between 1-30 April 2010

Capital Gains Tax:
31/01/2011 – Payment due on gains arising between 1 December 2010 to 31 December 2010

MONTHLY RETURN DEADLINES FOR DECEMBER 2010

PAYE/PRSI:
14/12/2010 – P30 monthly return and payment for November 2010

DWT:
14/12/2010 – Return and payment of DWT for November 2010

PSWT:
14/12/2010 – F30 monthly return and payment for November 2010

RCT:
14/12/2010 – RCT30 monthly return and payment for November 2010

Capital Gains Tax:
15/12/2010 – Payment due on gains arising between 1 January 2010 – 30 November 2010

Corporation Tax:
1-21/12/2010 – PT for APs ending between 1-31 January 2011
1-21/12/2010 – Returns for APs ending between 1-31 March 2010
1-21/12/2010 – Pay balance due on APs ending between 1-31 March 2010
1-31/12/2010 – Returns of Third Party Information for APs ending between 1-31 March 2010

MONTHLY RETURN DEADLINES FOR NOVEMBER 2010

PAYE/PRSI:
14/11/2010 – P30 monthly return and payment for October 2010

DWT:
14/11/2010 – Return and payment of DWT for October 2010

PSWT:
14/11/2010 – F30 monthly return and payment for October 2010

RCT:
14/11/2010 – RCT30 monthly return and payment for October 2010

VAT:
19/11/2010 – Bi-Monthly VAT 3 return and payment (if due) for period September/October 2010

Corporation Tax:
1-21/11/2010 – PT for APs ending between 1-31 December 2010
1-21/11/2010 – Returns for APs ending between 1-28 February 2010
1-21/11/2010 – Pay balance due on APs ending between 1-28 February 2010
1-30/11/2010 – Returns of Third Party Information for APs ending between 1-28 February 2010

MONTHLY RETURN DEADLINES FOR OCTOBER 2010

PAYE/PRSI:
14/10/2010 – P30 monthly return and payment for September 2010
14/10/2010 – P30 quarterly return and payment for July/September 2010

DWT:
14/10/2010 – Return and payment of DWT for September 2010

PSWT:
14/10/2010 – F30 monthly return and payment for September 2010

RCT:
14/10/2010 – RCT30 monthly return and payment for September 2010

Corporation Tax:
1-21/10/2010 – PT for APs ending between 1-30 November 2010
1-21/10/2010 – Returns for APs ending between 1-31 January 2010
1-21/10/2010 – Pay balance due on APs ending between 1-31 January 2010
1-31/10/2010 – Returns of Third Party Information for APs ending between 1-31 January 2010

Income Tax:
31/10/2010 – Preliminary Tax 2010
31/10/2010 – Pay balance of 2009 tax liability
31/10/2010 – Return of income for 2009

Capital Gains Tax:
31/10/2010 – Return of Capital Gains for 2009

MONTHLY RETURN DEADLINES FOR SEPTEMBER 2010

PAYE/PRSI:
14/09/2010 – P30 monthly return and payment for August 2010

DWT:
14/09/2010 – Return and payment of DWT for August 2010

PSWT:
14/09/2010 – F30 monthly return and payment for August 2010

RCT:
14/09/2010 – RCT30 monthly return and payment for August 2010

VAT:
19/09/2010 – Bi-Monthly VAT 3 return and payment (if due) for period July/August 2010
19/09/2010 – 4 Monthly VAT 3 return and payment (if due) for period May/August 2010

Corporation Tax:
1-21/09/2010 – PT for APs ending between 1-31 October 2010
1-21/09/2010 – Returns for APs ending between 1-31 December 2009
1-21/09/2010 – Pay balance due on APs ending between 1-31 December 2009
1-31/09/2010 – Returns of Third Party Information for APs ending between 1-31 December 2009