Pre-pack administrations have become increasingly popular across the UK. They essentially allow a liquidated company to be sold to new owners who will continue to operate the business. There rigorous regulations set in place to ensure that operations continue within the bounds of the law, plus a number of advantages that come along with taking this route.
Business as Normal
Opting for a pre-packed administration means that a company is sold as a ‘going concern’; it continues to operate without interruption. This is a huge benefit to staff members since they will continue to be employed, and your customers and clients will enjoy a continuity of service that wouldn’t have been possible under the terms of a traditional liquidation.
Even a small break can result in a dramatic loss of confidence, and it will be next to impossible to rehire the same team if employees were forced to look for other positions.
Prevents Negative Press
One of the biggest problems that comes along with undergoing the traditional liquidation process is that the company’s brand name will become somewhat tainted. For a business that hopes to continue under new owners, the negative publicity that this creates is often the kiss of death.
A pre-pack allows you to bypass most of that adverse attention. If public perception remains positive, the new company has a stronger chance of avoiding the problems that caused the need for liquidation in the first place.
Allows for the Effective Investment of Money
If you opt for a pre-pack administration, the money that would ordinarily have been used to pay off the debts of the previous company can instead be invested back into the business. That means that the new owners will be able to find the people, property, and equipment that they need to turn the new company into the most cost-effective one possible.
A pre-pack administration procedure is not without its disadvantages, but there are several compelling reasons why it has become such a popular option for businesses that are facing liquidation. To find out more, contact an experienced legal team today.