Introduction & Overview

 

The field of Corporate Insolvency covers a wide range of entities but the most common is a Limited Company with Share Capital.

The Directors of a Company are responsible for the day to day management of the Company whilst the Shareholders are the actual owners of the Company.  It is the Directors who will first become aware of the Company being in financial difficulties or heading towards an irrecoverable financial position.  It is also the Directors who have the legal obligation to take appropriate steps if they know or ought to know that the Company they are managing is insolvent or likely to become so.

For practical purposes the insolvency of a Company arises most often from the following two circumstances:- 

1          The Company's liabilities exceed the value of its assets.

OR

2          The Company is unable to pay its debts when they fall due. 

In these circumstances the Directors require to seek appropriate professional advice on steps they should take given the Company's financial circumstances.   

We at Hastings & Co. offer a free consultation service with Directors at which time appropriate advice is given which may  be to place the Company into Administration or take steps to formally wind up the Company, i.e. Liquidation.