Insolvent
Insolvency refers to the situation where an individual or company cannot meet its financial obligations as they come due.
Business Glossary provided by Plannit.ai
Insolvency can be cash-flow insolvency (unable to pay debts when they fall due) or balance-sheet insolvency (having more liabilities than assets on the balance sheet). It is a critical financial state that can lead to bankruptcy, where legal proceedings may restructure or liquidate the company's assets to pay off creditors. Insolvency is a significant concern for creditors and can affect the company's ability to raise capital.
Starting or Running a Business?
Generate a business plan in minutes.
