Insolvency

How insolvency works

UK company insolvency analysis can involve inability to pay debts as they fall due and liabilities exceeding assets, taking account of the relevant legal rules. Directors must consider their duties and obtain professional advice when financial distress arises.

Practical UK business example

A company repeatedly cannot pay suppliers and tax when due. Its directors seek licensed insolvency advice instead of assuming a new loan will resolve the underlying position.

Illustrative example only; not a finance quotation or a client case study.

Why it matters

Recognising the warning signs early may preserve options and reduce the risk of decisions that prejudice creditors.

Limitations and common misconceptions

One late payment does not automatically establish every legal insolvency test, and accounting losses are not the only test. This is not a substitute for advice from a qualified insolvency practitioner or solicitor.

Discuss business borrowing to discuss how the structure relates to your business.