Directors have a legal duty to ensure that their company is not trading whilst insolvent. But what does “trading whilst insolvent” really mean and how can it correctly be identified? This article provides an overview of the insolvency tests that can be applied to help company directors make an appropriate assessment of the situation.
Author: Louise Freestone
Louise Freestone is a Licensed Insolvency Practitioner with 12 years of experience in restructuring, turnaround and insolvency. She leads Bridgewood's corporate insolvency team.
Articles by Louise
We discuss the impact of intermediaries’ legislation (IR35) on contractors and their Personal Service Companies (PSCs).
When a director fails to fulfill their legal responsibilities, they run the risk of disqualification. The rules of disqualification are laid down in the Company Directors Disqualification Act 1986 (CDDA); the act is designed to restrict the abuse of the limited liability company structure.
We discuss overdrawn directors’ loan accounts (DLA) and explore how they can be a complex issue for Directors, especially if their company is insolvent and needs to enter an insolvency procedure.
Details of the proposed changes to company strike-off, through greater powers for the Secretary of State to investigate the conduct of Directors of dissolved companies.
The most significant changes to insolvency legislation (in England & Wales) in the last three decades were introduced on the 6th April 2017, aimed at modernising and updating present procedures.
Bridgewood is a trading style of Bridgewood Financial Solutions Limited (Company No: 06957765). Registered Office: Poynt South, Upper Parliament Street, Nottingham, NG1 6LF. Registered in England and Wales.
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Paul Mallatratt (Licence No. 2039) and Louise Freestone (Licence No. 2030) are licensed to act as insolvency practitioners in the UK by the Institute of Chartered Accountants in England and Wales and are subject to their Code of Ethics, available in English at www.icaew.com[...]code-of-ethics-d
In carrying out the regulated profession of Insolvency, the firm is subject to the Insolvency Regulations and Guidance Notes at www.icaew.com/insolvency and the Statements of Practice at www.icaew.com[...]insolvency-regulations-and-standards