Corporate Insolvency: Additional Tests Relating to Cash Flow

by Martin on May 28, 2012

Companies incorporated in Scotland or Northern Ireland have different laws to those incorporated in England and Wales, and this includes the law relating to insolvency.  In addition to a demand being served on the company for monies outstanding, a creditor can obtain a judgment or court order requiring the company to pay the amount outstanding within a specified timeframe.  Failure to meet this liability means the company is deemed insolvent.  Equally, if a court believes a company cannot meet its debts when they fall due, the company is deemed insolvent.  If you monitor your accounts and make payments when they are required, these issues will not affect you.  However, if you don’t know how to check for these possibilities, or you suspect that your company will have problems paying its debts, professional advice from an insolvency practitioner is essential.

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