4th February 2022

Is my Company trading while insolvent?

When a company is insolvent company directors must prioritise the interests of the company's creditors. If the company continues operating as normal this is known as trading while insolvent.

Trading while insolvent is unlawful and can have serious personal consequences for directors.

If you're a director and you knowingly trade while insolvent, you can be held personally responsible for company liabilities and you can be disqualified from holding other directorships.

How do I know if my company is insolvent?

According to the Insolvency Act 1986, a company is insolvent if it can't meet its day-to-day obligations.

This includes: