Insolvency occurs when a business can no longer pay its debts. It is illegal for directors of a business to continue operations and incur further debt when their business is insolvent. Insolvency can
Financially distressed SMEs should take advantage of the 6-month provisions in place during the Covid-19 crisis to avoid insolvencies. Pinpoint underlying issues, understand key stakeholders’...
Can you get your money back? What are your options and procedures?
You should be aware of late payments and your debtor’s situation before they get to an insolvent stage, so you can negotiate directly and have a better chance of recovering money owed to you. A business can be restructured and undergo a turnaround plan.
However, if they are already under administration, which will eventually happen when a business becomes insolvent, you may or may not get your money back depending on the circumstances and how many creditors there are. ASIC has some advice on what to do if you are dealing with an insolvent business.
It’s risky to depend most of your revenue from one customer source. Do a background credit check, create clear business terms or reconsider when necessary. Sync payment systems with your customer...
What does each term means and how do they apply to you or your business from a legal perspective?
Insolvency is when a person or company is unable to pay their debts, due to reasons such as cash flow, economic downturn, fraud, etc. An insolvent business does not have to cease operations. It has several options to resolve the insolvency. Meanwhile, bankruptcy is when a person, not a company, can’t pay his or her debts, and a bankruptcy proceeding needs to be taken to recover the debts.
Sometimes when I talk to clients about insolvency it is a bit like talking about death. They just don't want to do it or believe it. Last month a client of mine was put into liquidation....
The other week I wrote an article on what happens when things go wrong. Well today, I want to highlight some of the things that typically exist when things are starting to go wrong. Detailed below...
When we start out in business, we have a vision which for most of us, resolves around a profitable growing business. However, sometimes things do not work out as expected and our businesses may get...
Thanks for the article Andrew! Pretty scary to think what happens if my business fails but nonetheless always a good idea to know the different types of insolvency, especially when legal advice is so expensive and hard to get.