Private Equity for struggling companies

It seems there are always some wealthy individuals ready to invest in a struggling company. But whilst the directors would love to get their hands on some extra private equity funding - the word 'equity' is the key word that should give pause for thought. In most cases, you're giving away a chunk of company equity in return for the business finance. Now in the case of company's facing liquidation - that might seem like a reasonable deal. You'd be giving away something that may soon be nothing. But the second sting of private equity may only balance the second blessing. The sting? The new director will want to make some changes that may have been causative, and that might be you or fellow directors. The blessing? The new director is generally experienced in the field of this particular industry and will be able to assist in most cases. Good luck.

What makes for good administration for a company?

The administration for a company is what keeps everything alive. It's the skeleton and the glue, and the what-not that makes up a company. And to hire a good administration, or have experience and talent at creating a good administration is the key to becoming successful. An administration consists of the performance or management of business operations, thus the better you operate your company, the better administration, and company you have. Find people who know what they are doing to help you out.

If I get private equity investment, what exit route exists for the investor?

If I get private equity investment, what exit route exists for the investor? If you're not sure what a PEI is, then you probably wouldn't be asking this question. But just in case, make sure you look it up or I'll just confuse you. Now, onward to the answer. No safe exit routes exist for the investor. They're doomed. Just like a publicly traded stock, a PEI is a risk. It is up to the investor to choose wisely, and if your company succeeds, then it's great for the investor. And if not, then he is as worse off as he would have been had he invested in the stock market. Of course, any smart private equity investor will have contracted a way to screw you whilst taking off with your company lock stock and barrels. Then it's not him - it's you that's doomed.

What will they do if I'm struggling to pay my company tax?

What will they do if I'm struggling to pay my company tax? This is a good question. Well, lets take it from the beginning. If your having trouble paying, it means your business isn't doing too well. The first step for that would be to get your company back on track. There are several ways to do this. One would be to hire a turnaround finance group. Another would be to get a loan from the banks to help boost your company. But if the government is on your back for those taxes, file a case that you are unable to pay the taxes, yet are working on a turnaround that has a high change of success. That should buy you some time to cook the books a little more and try to confuse the revenue service. Could work.... could. Probably won't though.

What happens if I send my business tax late?

What happens if I send my business tax late? This is a question I have heard alot of times over the past few months because of the current state of the economy. Like any government, the more business in their land = more trade = more money. And seeing as the government charges business taxes in the first place, it is their move to take action on your company. The government wants to see your company become better, so they won't immediately force a liquidation or anything, but if you find you can't pay taxes, ask the government for help. They have programs. They won't crush you. More of a slow squeeze...

Can the government wind up my company?

We have talked about a wind up petition in the past, which is a petition to put a company under a forced liquidation. Now the question - Can the government wind up my company - is a very easy answer. Yes. Many times a wind up petition is put on by the government in the first place, and your damn straight, if they put it on, they will end it. It is also sometimes the governments duty to force the liquidation unless all the assets to the company are resting on the power of a bank who loaned unclaimed money to the company in the first place. Clear? Mud? If this doesn't answer everything for you -the government is going to wind up your company. It's for the good of us all. We need clever people running the businesses in the country, not half wits.

Who is the company's preferential creditor?

Who is the company's preferential creditor? Well, to answer this, I'll be creative like all great writers and give you the definition straight from the dictionary - A preferential creditor is a creditor who receives a preferential right to payment upon the debtor's bankruptcy. Now, I don't really think that giving you that definition helps your little brain out at all. That is probably too much information at once for you, so lets break it down. Your fancy preferential creditor is a predetermined person or group who is responsible in settling a company's debt in event of total bankruptcy. They will get you. You can run, but they'll catch you and take all your smarties.

In banking, what is a floating and a fixed charge?

As we all know, or can guess, that a fixed charge is a certain agreement to keep a debt at a steady and same payment plan forever for each term of payment. But many people don't understand floating charges. They sound pretty unstable, and they are. Lets say you owe me 20 bucks, and must pay me a payment each week. With a floating charge agreement, I can charge you anywhere between a two certain amounts. I could charge 3 one week, and 5.50 the next. But with a fixed charge, I must charge you exactly the same each week. 6.75 sounds good to me. Fix it. Or move to the Bahamas - quick.