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When it comes to third sector organisations and insolvency, you need specialist advice.
Mostly this is because bodies such as charities, community organisations, and mutual societies operate under different structures than a regular business. That means you need someone who understands the unique nature of them in relation to:
It can be a complex area if you aren’t familiar with it.
Here at Smart Business Recovery, we help all kinds of organisations that are generally bundled under the category of ‘third sector’. People often contact us for the answers to questions and problems such as:
‘Is my social club insolvent?’,
‘What do I do if a charity can’t pay its bills?’
‘I am managing a CIC, and we are facing financial difficulties’
‘The membership has diminished so we want to close our community group’
‘We are looking at closing our group but there are property and land assets involved’
It is perfectly reasonable that you should be asking these, and any other questions you may have, about closing a third-sector group. Often people are not sure what law applies to them, where they stand legally, or even what sort of organisation they officially are. That is where our expert team comes in. We are here to provide insolvency and restructuring solutions for third-sector groups.
For any organisation facing financial problems, though, from not-for-profit businesses to membership-based organisations and charities, the best first action is to find out exactly where you stand.
If you are connected to the third sector area you will probably be one of the following. For more information, click through to the specialist page for each area. If you aren’t sure what sort of organisation you are, then these pages should clarify things a little.
Alternatively, if you know what sort of organisation you are and you feel you are insolvent, heading for insolvency, or want to voluntarily close your organisation, let’s talk.
In many cases, closing a third sector organisation could mean shutting the doors on a social club that has been welcoming trade-specific members for decades or perhaps pulling the blinds down on a charity that was set up to help a cherished cause. Even in the case of a Community Interest Company (CIC), which would have been set up as a business, there is often a big emotional element involved.
In short, this is as much about people as it is about finances. We understand that. We also know that often the management, boards, trustees and so on, are sometimes unsure of how to proceed.
Don’t worry, we’re here to help.
First Things First – Let’s Start with the BasicsBefore anything else, we will need to know:
What the financial position is. The sad truth is that if there is simply not enough money to pay the bills, then you are probably looking at insolvency. However, let’s make sure and see where you stand before we make that decision. We aren’t here to automatically close your organisation; we are here to see if that is the right course of action.
What sort of organisation you are. Many organisations can answer this question easily, but for some charities and social society type organisations, it can be a bit more complex. Maybe the committee members have changed multiple times over the years, the paperwork is now missing and so on. So, let’s make sure we know what we are dealing with.
Who is involved. Again, this could be as simple as the managing board, or as complex as multiple memberships with no accurate records.
What you want to happen next. Whether you can recover and continue to trade, if you need to go the insolvency route, or if you are voluntarily closing down, you will need to meet the legal and ethical requirements around dealing with creditors and distributing assets.