• Que.

    what is insolvent trading


    Insolvent trading occurs when a company continues to operate despite being unable to pay its debts as they fall due. This often happens when company directors ignore warning signs of financial distress and allow the business to incur further debt, worsening the situation for creditors. In many jurisdictions, directors have a legal obligation to prevent insolvent trading to protect the interests of creditors. Failure to fulfill this duty can lead to serious consequences for directors, including personal liability for debts incurred while the company was insolvent. It's crucial for directors to seek professional advice and take appropriate action when facing financial difficulties.

    Mar 22 2024

Related Questions

Message me