SCARP: The Small Company Rescue Process Explained

Examinership rescued companies but priced out small ones; SCARP — the Small Company Administrative Rescue Process, introduced in 2021 and refined by the 2024 Act — is the remedy sized for the rest of the economy: the shop, the contractor, the services company that trades well but owes too much. Court-light, process-adviser-led, and built for exactly one thing: the viable business inside the broken balance sheet.

The Shape of the Process

• Eligibility: small and micro companies, insolvent or heading there, with a reasonable prospect of survival;
• The process adviser: an insolvency practitioner who assesses viability, formulates the rescue plan and runs the creditor process — while the directors keep running the business;
• The plan: debts restructured to what the viable business can carry, approved through statutory creditor machinery with class voting and objection routes;
• Court-light by design: the administrative architecture is where the speed and affordability live, with court available where objections require it.

The Honest Assessment First

SCARP’s gateway question — is there a viable business in here? — deserves an honest answer before the process, not during it. That answer is built with the accountant (the numbers are theirs; the consequences ours) and it sorts companies into their real categories: the rescuable, who should move now; and the finished, for whom an orderly ending is the better service — both mapped at the insolvency practice. What serves nobody is the middle path of waiting: SCARP is a speed-sensitive remedy, and creditor patience, cash and trading relationships are the fuel it runs on.

The Directors’ Dimension

A genuine rescue attempt is stewardship evidence of the best kind — trouble recognised, advice taken, statutory machinery engaged — the record that answers section 819 scrutiny before it is raised. Run the twin tracks from the first meeting: the company’s rescue, and the directors’ documented conduct through it — decisions minuted, creditors’ interests visibly weighed, the duties performed on paper. Companies fail honestly all the time; SCARP exists so the viable ones don’t have to, and the record exists so the honest directors can prove it either way.