insolvent is to be unable to pay your debts as and when they fall due – if your company was suddenly asked to pay all of its debts in full, would it be able to? If the answer is “no”, chances are it is insolvent.
If a company is insolvent, or if it is looking likely that it will become insolvent, the company director/s need to consider taking the active step of appointing a liquidator on a voluntary basis. To not do so is to place oneself at risk of “insolvent trading”, meaning that the company has incurred debt during a time in which it was insolvent. To be found guilty of insolvent trading it must be proven that the director/s of the company had knowledge that the company was insolvent or ought to have realised that the company was insolvent. If you suspect your company may be insolvent you should call us straight away so that we can help you to ascertain if it is so.
There are two ways in which a company can be wound up; either voluntarily, or via the Court. A voluntary liquidation involves the director/s acknowledging the situation and appointing a liquidator to wind up the company and ensure that it is done properly and fairly. For a Court to determine that a company should be wound up they need to have received an application from acreditor of the company. It is not usually recommended that one waits until a creditor makes such an application, as it is a lengthier and more complicated process.
If there is a chance that your company is either insolvent or close to it, call us today on 1800 003 883. We can carry out an assessment of the company’s affairs and confirm whether or not a company liquidation is necessary.
We are available 24 hours 7 days a week for free and confidential advice.