What Is Company Insolvency?

Company insolvency means a business can no longer pay its debts or its liabilities have become greater than its assets. When this happens, the company may enter a formal legal insolvency process.

An independent insolvency practitioner is appointed to review the company’s finances, identify creditors, and distribute any remaining assets according to the law. Their role is to ensure the process is fair and follows legal requirements.

Many business owners think insolvency simply means “closing the company and walking away.” In reality, it’s a structured legal procedure, and it isn’t always the best solution for every business.

If your company is experiencing financial difficulties, getting professional advice early can help you understand your options before the situation becomes more serious.