There are several reasons why a company might become insolvent. The most obvious reason is that the company cannot pay its debts. If a company is unable to pay its debts it is deemed insolvent and will need to stop trading.

The process for company insolvency uk is governed by a number of pieces of legislation. In England and Wales these include the Insolvency Act 1986, The Insolvency Rules 2016 and The Insolvency (Company Voluntary Arrangement and Administration) Rules 2018 and The Insolvency (Receivership and Winding up) Rules 2018. There is similar legislation in Scotland and Northern Ireland.

Delving into the Significance of Insolvency for Companies: An Overview

Once an insolvency practitioner has been appointed to a company the first thing they need to do is carry out a thorough investigation. This will involve examining all the company books, assets and any book debts. They will also need to prepare a list of creditors with details of precise money owed, names and reference numbers. Once this has been done the insolvency practitioner will inform each creditor of the companies position.

It is important to seek insolvency advice early to maximize the chances of saving your company. If you continue to trade your company once it is insolvent you are putting the interests of your creditors at risk and are likely to be disqualified as a director by the Secretary of State. An experienced insolvency practitioner will be able to talk you through the available options, and determine the most appropriate next step for your company.

…