Is my Company Insolvent?

There are two tests to determine if your company is insolvent or not:

  The Balance Sheet Test – where your company’s liabilities exceeds the value of its assets

  The Commercial Test – where you cannot meet your liabilities as and when they fall due

If you meet either one or both of these tests, you need to take positive action. It might not necessarily mean that you have to deal with the company’s affairs formally as long as there is a realistic belief that the company can generate profits in the future to return the business to a solvent position.

You must be aware that if action is not taken and the position financially deteriorates over time, then there may be issues of Wrongful Trading which can lead to personal liability on the Directors for not having taken action sooner.

Addressing the Problem

What do I do if my company is insolvent?

Talk to us immediately. Continuing to trade without any real prospect of avoiding Liquidation runs the risk of Wrongful Trading which gives rise to the prospect of personal liability. We can determine how to deal with your challenges.

Advisory

  • Where there isn’t the need for formal restructuring, our Advisory team can work with you to deal with the operational and/or financial challenges to restore the company to solvency

Restructuring

  • If a business is fundamentally viable but its liabilities are significant, then a formal restructuring process is likely to be required in order for the business to be saved. The options available would be either an Administration or a CVA

Liquidation

Let’s Talk

It’s important to speak to people who can help as early as possible. We have experienced teams who can help you and work with you to achieve the best outcomes for you and your business. For a no-obligatory chat, complete the form opposite, include a best time for us to call you and a Partner will be in touch.


Alternatively, book a convenient time for us to contact you