Worried about insolvency? Are you asking is my company insolvent or is my business insolvent?
The three test of insolvency are the following.
The cashflow test
The balance sheet test
The legal actions test
The simple one first is; Can you pay your creditors on time when they are due?
Are you assets worth less than your liabilities?
Finally, are you facing legal action for proven debts that you owe?
You can have a look at our page which sets out the tests in more detail. If you want to know more please visit our more detailed guide on the insolvency test page.
Even if your business is insolvent now it does not mean that it doesn't have a future! Many businesses survive hard times and become stronger as a result. Companies that are profitable, viable and have a good future can still have cashflow problems. The important thing is to not just hope that it will fix itself. The business might need some short term relief from its debts. This can be done in many ways. A time to pay deal with HMRC or informal deal with the creditors is an option. If legal action is being threatened then a CVA can stop aggressive creditors and protect the company.
Call us for a friendly chat on 0800 9700539. We will meet directors for free followed up by a written report.