Is my Company Insolvent?
It is very easy to answer the question “Is my company Insolvent?”
The Insolvency Act lays down a few simple insolvency tests, two of which stand out:
- Balance sheet test – Are your assets less than your liabilities? If yes, you are insolvent; If no, you are probably not insolvent, however…
- Cash flow test – Can you pay your debts as they fall due (e.g. PAYE by 19th of the following month)? If yes, you are not cashflow insolvent; If no, you are probably trading insolvently and might have a problem.
If your company is insolvent or you think it might be, do not panic, it may only be a temporary problem and you may trade out of it, however you MUST seek further advice otherwise if it goes under at a much later date, you could find yourself answering some tricky questions and possibly being asked to personally contribute towards the deficiency to creditors.
Contact us now on 0330 900 2000 for insolvency advice and to start the process of dealing with your insolvent company.