Updated: Feb 23
Trading in the “new normal” is fraught with difficulty for many businesses. The uncertainty and the complete stop that we have all had to endure in so many businesses is unheard of. Even the savviest of business owners have been caught out by the pandemic. So, if you feel like you have “caught a cold” then you can take heart that “you’re not on your own”!
Lockdowns have caused so many businesses to literally “hibernate” from their situation. The company ceased trading owes money. They are not failed businesses, but they have business ceased trading. The impact of this on your business is that your own cashflow may have been impacted by customers not paying you, so in turn, you can’t pay your suppliers and your overheads.
What Does Ceased Trading Mean?
Ceased trading with immediate effect is a twilight zone between trading or not – and we think it needs to be looked at carefully, so you extract what you are owed as quickly as possible. Ceased trading situations can move into insolvency situations overnight – and you have probably seen big corporates sheltering under an insolvency measure.
As High Court Enforcement Officers we are often asked to go and check out a shop or warehouse which has gone into a “ceased trading” or hibernation status. The plus point on these cases is that when companies do hibernate, they often leave their stock and business equipment in place. This means we can help creditors use the leverage of a High Court Writ to get back what they are owed without going near an insolvency measure.
So, to stay ahead of what we might call “the insolvency curve” the first question to ask is "what do we mean by ceased trading letter?” Are we talking about a business that has left its trading address leaving cardboard boxes on the shop floor, or are we talking about a business that has left an empty office, warehouse or pub behind?
To make sure the target of any action – whether it’s a business or an individual – hasn’t yet become insolvent – you can make some simple online checks.
For an individual, you can check the Individual Insolvency Register.