What Do I Do If I Suspect My Company Is Insolvent?

Insolvency In Ireland - What Is InsolvencyIf you suspect your company is insolvent, now is the time to act. There are serious consequences you could face if you continue to trade knowing that your business is insolvent, up to and including fines and being unable to hold a director’s position for several years! As soon as you have doubts about your company’s solid footing the first thing to do is determine if you business is actually underwater or in danger of going under.

Check the Bills

Look at your bills; are they being paid on time? On time is not defined as before you are evicted, the utilities shut off or your supplier refuses to deliver. All of your bills should be paid on or before the date, they are due. If they are being paid late, even a few days, it is definitely time to look into your business and see if there is any way to rectify the situation.

Liabilities versus Assets

Another way to determine the financial well-being of your business is to look at your liabilities versus your assets. Even if you are having a bit of trouble with the bills you could still be solvent if your assets outnumber your liabilities. With that being said, it is still important that you determine where the problems are and set about fixing them immediately.

Trading Underwater
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The Top Causes of Business Insolvency

The following is a list of the top causes of business insolvency, but in order for you to really understand these causes, first we need an understanding of what business insolvency means.

When a business is said to be insolvent, it means that it no longer has the capacity to repay its debts to its creditors in due time.

Business insolvency can result in receivership (a receiver is appointed by a courts to act as a temporary director of an insolvent company to try rescue it from its debts), liquidation (the only option left if the company has no way to pay its debts but to liquidate itself), or total bankruptcy.

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