Clear Guidance When a Company Cannot Meet Its Obligations
Insolvency describes a financial position, not a foregone conclusion. Understanding precisely where a company stands is what determines which routes remain open.
Professional advice is likely warranted if:
- The company cannot pay debts as they fall due
- Liabilities appear to exceed assets
- A statutory demand or winding-up application has been received
- Lenders have raised concerns or withdrawn facilities
- Directors are unsure what they can and cannot do next
Insolvency Is a Position, Not an Outcome
A company can be insolvent on a cash-flow basis, on a balance-sheet basis, or both. The distinction matters, because it affects which options are available and what directors are expected to do.
We establish the position first, then set out the routes that follow from it — restructuring, an orderly winding-up, or another arrangement altogether.
From an Unclear Position to a Defined One
Establish the Position
We determine whether, and on what basis, the company is insolvent.
Map the Consequences
We set out what the position means for the company, its directors and its creditors.
Identify the Routes
We explain each available route and its practical implications.
Support the Decision
We provide structured support once a direction has been chosen.
What Directors Should Weigh
Duties Towards Creditors
Once insolvency is likely, directors must have regard to creditors' interests. This shift happens before the company actually fails.
Continued Trading
Trading on without a reasonable basis for believing the position will improve is where personal exposure most often arises.
Transactions Under Review
Payments and transfers made while insolvent can be revisited later, particularly where one creditor was preferred.
Records and Reasoning
Contemporaneous records of why decisions were made carry far more weight than explanations reconstructed afterwards.
How an Insolvency Review Works
The purpose of the first conversation is to establish facts, not to commit you to a course of action.
- A confidential review of the financial position
- Assessment against the relevant insolvency tests
- A clear explanation of directors' duties at this point
- The routes available, with the implications of each
- Ongoing support if a formal process becomes appropriate
Questions Directors Ask
Further questions are answered in our central FAQ hub.
Does insolvency automatically mean the company closes?
No. Insolvency describes a financial position. Restructuring, refinancing and other routes may still be available depending on the circumstances.
What is a statutory demand?
A formal demand for payment of a debt. Ignoring one can lead to a winding-up application, so it should be addressed promptly and with advice.
Can directors be held personally liable?
Generally the company is a separate legal person, but personal guarantees and conduct such as trading without reasonable basis can create personal exposure.
Should we tell our creditors?
Timing and sequencing matter. We advise on this rather than leaving it to instinct, because the approach affects what remains achievable.
Is an initial conversation confidential?
Yes, and it carries no obligation.
You May Also Need
Business Restructuring & Turnaround
Exploring options to restore stability and support business recovery.
Voluntary Liquidation
Structured support for companies considering an orderly winding-up process.
Compulsory Liquidation
Professional assistance in matters relating to court-directed liquidation.
Establish Where the Company Actually Stands
A clear reading of the position is what every subsequent decision depends on.