I’m Martin Armstrong – Senior Partner of Turpin Barker Armstrong I was one of the founders of the practice in 1985 and so I have been advising businesses on insolvency related matters since that time What determines insolvency in relation to a company? The Insolvency Act 1986, section 123 is quite specific it says a company is insolvent if it’s unable to pay it’s debts as they fall due and or its insolvent on a net asset basis – the balance sheet test. Either of those things makes a company insolvent and puts additional obligations on directors’ of that company There are common warning signs which we see one of more of these in most cases that come to us for an initial consultation and I guess in many ways they are obvious: demands from the creditors, lack of management information late filing of accounts because of poor results, maximised overdraft at the limit all of the time directors’ making loans to the company cash flow problems struggling to pay the wages including the directors own wages or being chased by HM revenue and customs for any of the taxes that are due. If any of those circumstances arise its very important for directors to receive professional advice because it provides a layer of protection for them if they are taking advice on the steps they can take it provides that protection for them which otherwise may not be there