Is Your Business Solvent or Insolvent

Starting and running a business in these troubled economic times is difficult to say the least. Often concerned companies are simply trying to hold on until the economy turns around or until their big break comes. Does this mindset describe your attitude in your current business? Do you know if your business is solvent? Are you breaking the law by continuing to trade insolvently? Are you aware of the options you have under the insolvency act to protect yourself from creditors? While this subject is vast, and cannot be adequately addressed in this article, non-the-less, we will attempt to give you some warning signs that your business might be in trouble. Being aware of these signs might help you seek professional business counsel before it is too late. The beginning signs that the business is in trouble includes, negative or poor cashflow, operating at an ongoing loss, problems gaining financing and unpaid creditors. These signs should not be ignored, as they indicate deeper problems that will not go away without insolvency advice or counsel. It is possible that the problems began even in the earliest months of the business if there is a lack of a business plan. Failure to develop a business plan before ever starting the business set the foundation of the business on shaky ground from the beginning. Often a lack of a business plan is accompanied by disorganized financial records and internal accounting practices. If cash flow, financial records and accounting procedures are not carefully guarded, it will be easy for a business to fall into insolvency very quickly. Other indications of insolvency include: increasing debt, difficulty collecting unpaid accounts or selling stock, loans that are unrecoverable. These conditions are many times accompanied by warrants issued against the business and legal summons to appear in court because of unpaid debt or bills. Problems gaining financial backing, difficulty selling stock, and post-dated or even unsecure checks are further indications of problems. All these problems should be dealt with immediately by seeking professional business counsel. Rather than wait for creditors or solicitors to take control of the situation, you should proactively seek expert advice. By settling the issues when they first begin, these financial experts can turn the situation around and you can begin running a profitable or at least solvent business again. Solvency counselors and/or insolvency auditors are trained to provide solutions to insolvency. They understand the difficulty of addressing concepts such as liquidation. They know how to move through the insolvency process and help to restructure the business to get it growing again. There is no disgrace in insolvency if it is used as a stepping stone, or learning experience to make your company stronger with the restructure. Some of the issues that are addressed by these counselors and professional business experts include asset protection, (especially when you have invested much of your personal assets in your business) creditor mediation and negotiation, and insolvency support. They will help you explore liquidation so that the company can restart without liabilities. They will help you to develop a business plan for a restart so that you can start out on the right foot. They will educate you in best practices for accounting and record keeping so that you can run your business in a strategically organized manner. When you sense your business is facing insolvency, it is important to address the issue right away and seek counsel. There are organizations that exist for this purpose. You may find counsel by searching online for insolvency auditors or business insolvency advice. Look for an advisor who is ethical in practice, and is familiar with the legalities of the issue. Often advisors will offer a free initial consultation meeting to help you assess your need of their services. Do not ignore the warning signs. They will not go away if you pretend they are not there, instead seek professional business insolvency advice as quickly as possible.

There are lots of reasons why people may need insolvency services for their business. It can be a very stressful time if you are faced with need business insolvency