If you find yourself in the position that you are unable to clear your liabilities as they fall due, you are insolvent and need to cease trading with immediate effect.
Insolvency can occur unexpectedly, but often it comes after months, if not years, of desperately trying to keep the business afloat.
Major Reasons for Insolvencies
The reasons for insolvency are many, and I include the more likely as follows:
1.Dominant customer: Often, a business’s downfall can be as a result of it successfully gaining a contract with a major customer. In these circumstances, if the customer is of a much larger size than the business and thus can control the relationship, this can often lead to sales being made for less ...
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