When a business is unable to pay its debts fall due, it is considered insolvent. As a result, the business may enter liquidation or receivership.
Receivers are appointed to raise funds within the business to repay a financier.
Liquidation becomes necessary when so many of the business’ assets are sold that it cannot continue its daily business. A liquidator disposes of all the business’ assets, repays the creditors, and the business ceases to exist.
Is your business presenting any of the warning signs of involvency that could affect its ongoing viability?
- Cashflow shortages
- Requesting extended payment terms
- Refinancing assets or debt to pay bills or retrieve equity in cash
- Reliance on cash reserves
- Unable to obtain finance
- Erosion of the business’ working capital as a result of trading losses
- Inability to make statutory payments on time
If your business is suffering due to financial and operational pressures, timely advice and proactive action is imperative to avoid or minimise the ramifications of insolvency.
In the event that liquidation or receivership is unavailable, Plus 1 Group has a necessary skills and experience to assist.