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Practical advice for business
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Avoid insolvency


A business is insolvent if it doesn't have enough assets to cover its debts, or it is unable to pay its debts as and when they are due.

If you monitor your business' actual performance against the budget and the cashflow forecast regularly, this will give you an early warning of potential problems. You can then take action to avoid insolvency.

This guide provides information on how to reduce the risk of insolvency by suggesting actions to take and sources of advice to approach. It also describes possible outcomes of insolvency for different types of business.

Subjects covered in this guide

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Buy or sell a business

Businesses in difficulty


Avoid insolvency


Current section



Improve cashflow


Negotiate with creditors


Reduce overheads


Importance of advice when avoiding insolvency


Possible outcomes for limited companies


Insolvency outcomes for partnerships and sole traders