Insolvent, what does this mean?
S123 IA 1986 sets out the definition of Insolvency:- Creditor(s) are owed more than £750 and have either served a 21 day demand which has not been met or judgment has been given or it is proved to the satisfaction of the Court that the company cannot pay its debts as they fall due or the company's liabilities exceed its assets including contingent liabilities.
WHEN CAN A COMPULSORY LIQUIDATION OCCUR?
Compulsory Liquidation Winding-up is a court procedure usually initiated by a creditor of the company when all other debt collection procedures have failed. When a company is insolvent and fails to pay its debts, creditors can take steps to wind up the company by issuing a petition to Court. The procedure can also be used by the directors and shareholders of an insolvent company. There are other parties who can petition including the Secretary of State, the Official Receiver and a Supervisor of a Company Voluntary Arrangement. As with any type of debt solution, the Business Debt Advisor offers business liquidation advice to any companies who feel this may be an option
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