When a company becomes insolvent, it is unable to repay its debts as it has insufficient assets or possibly cashflow problems.

An insolvent company typically has five options available to it: administration, company voluntary arrangement (CVA), administrative receivership, compulsory liquidation or a  creditors’ voluntary liquidation (CVL).

Only licensed insolvency practitioners are appointed to conduct the insolvency process in place of the company directors. If possible, it is preferable for a company to carry on trading and attempt to repay its debts rather than go into liquidation or bankruptcy.