Insolvency matters take many forms and are always urgent. Ignoring the issue and doing nothing is never the right solution. Whether you’re having issues with a supplier, a customer, or the ATO itself, the best course of action is to take expert advice as early as possible.
This is where Paladin Legal comes in. Our team of highly skilled lawyers will work closely with you to provide expert advice on all aspects of administration, insolvency, and bankruptcy.
What Is Insolvency?
Insolvency is a legal term that refers to the inability to meet financial obligations—such as bills and debts—when they become due. There are many different factors that cause corporate insolvency, including cash flow mismanagement, bad refinancing decisions, and legal problems.
If your business continues to operate while it is insolvent, you may be held personally liable for the unpaid debts your company incurs during this period. This can then quickly snowball into bankruptcy.
Financial Red Flags
There are a number of red flags that indicate your business is in financial trouble. Here are the most common signs:
- Persistent cash flow problems – these include poor or negative cash flow and increasing debt
- Problems with the ATO – examples include overdue taxes, fines, and superannuation liabilities
- Legal issues – if there are solicitors’ letters, summonses, and judgements issued against your company
- Management issues – these include internal management problems that disrupt normal company operations like board disputes and director resignations
- Financing setbacks – defaulting on loans or reaching overdraft limit. This also includes failure to secure additional financing.
Contact Us Now!
We’d love to speak with you about how Paladin Legal can assist with your needs.