Company insolvency
When your business is under financial pressure, clear and honest company insolvency advice can help you make the right decisions and avoid unnecessary risks.
Last Updated: 13/05/2026
Supporting your business through challenging times
At McTear Williams & Wood, we specialise in supporting small businesses through to large corporates and directors who need fast, practical guidance on their options. In fact, we deal with more businesses in the South of England than any other regional firm, and so we have a deep appreciation of the issues facing owner managers and how best to navigate these.
With more than 25 years’ experience and a reputation for ethical, high-quality advice, we can help you understand what insolvency means for your business and what routes are open to you.
A free, no-obligation advice meeting is available for every enquiry. Our first priority is always to explore whether the business can be rescued.
What is company insolvency?
A company is insolvent when it cannot pay its debts as they fall due, or when its liabilities exceed its assets. . This situation is more common than many directors realise, particularly during periods of rising costs, cash flow pressure, or loss of a major contract.
Insolvency does not automatically mean your company must cease trading. In many cases, early advice opens the door to rescue, restructuring or negotiation with creditors. Taking early advice. View our Brief Guide to Insolvency >
How do I know if my company is insolvent?
Directors often miss early warning signs because they are focused on day-to-day operations. Common indicators to watch out for:
- Consistent cash flow shortages
- Pressure from creditors or HMRC
- Maxed-out overdrafts or borrowing
- Difficulty paying wages or suppliers on time
- Loss of a key customer
- Growing arrears and repayment plans that can’t be met
Director
- 01603 877542
- 07802 826591
- andrewmctear@mw-w.com
- Prospect House, Rouen Road, Norwich NR1 1RE
Understand your financial options
Check the health of your business with our free business health check tool.
Get an indication as to whether your company has what it needs to survive.
Includes:
-Company health assessment
-Types of liquidation available
-Options & next steps
*All information provided is completely confidential and will not be shared with a third party
Recognising insolvency early is essential because it fundamentally changes a director’s responsibilities. In this video, we explain the three legal benchmarks used to assess your financial position.
If any of these sound familiar, the safest next step is to request early company insolvency advice. Early intervention protects your position as a director and gives you more options and helps you avoid personal liability.
What options are available if my company is insolvent?
Every business is different, which is why our team takes time to understand your situation before recommending what route to take.
Can the business be rescued?
If the underlying business is viable, options may include:
Business rescue & turnaround – stabilising cash flow, restructuring operations or finance.
Company voluntary arrangement (CVA) – a legally binding agreement with creditors that allows continued trading.
Company administration – protecting the company from legal action while a rescue plan is prepared.
What if the business cannot continue?
If closure is the right route, the main formal processes are:
Creditors’ voluntary liquidation (CVL) – the most common route for insolvent companies; voluntary, structured and director-led.
Compulsory liquidation – where a creditor forces a company into liquidation via the courts.
Pre-pack administration – where the business and assets are sold immediately upon entering administration – this can also be done in a CVL.
We explain every option clearly and help you choose the most appropriate, compliant way forward.
When a business enters a distressed situation you will frequently find that major choices must be finalised within days rather than weeks.
This video highlights what documents you need to gather, including:
- Management accounts and a short term cash flow projection.
- Comprehensive lists of aged creditors and debtors.
- Information on key contracts, financial records, and company assets.
The success of your final outcome is heavily dependent on how quickly you can take action. Get in touch today to find out more.
Free advice line for distressed company directors > 08003317417
What is my personal risk as a director?
If you suspect your business is insolvent, you have a legal duty to act in the best interests of creditors. Failing to do so can expose directors to risks, including:
- Personal liability for company debts
- Claims for wrongful or misfeasant trading
- Disqualification
- Loss of control over the process
Speaking to an insolvency specialist early greatly reduces these risks. Our role is to protect you by ensuring the right steps are taken at the right time.
BUSINESS RESCUE & INSOLVENCY SPECIALISTS
Download your free Directors' guide
This free, easy-to-read guide is designed to help directors whose company is in financial distress. It will assist directors to navigate around insolvency issues and avoid potential pitfalls, split over ten sections this guide walks you through the matters in a logical order you are
likely to need to consider.
Why choose McTear Williams & Wood?
Directors, accountants and solicitors routinely choose MWW because we are known for:
- Ethical, practical advice. We never push directors into liquidation unnecessarily, unlike many firms in the industry. We explore all rescue options first. We never ask directors to put their hands in their own pockets to pay.
- Experience across sectors. From manufacturing and professional services to retail, construction and charities, our team has guided thousands of businesses through financial distress. We also work extensively with solicitors on insolvency-related legal investigations and claims.
- A complete service under one roof. Your case is supported by a team of specialists in business rescue, insolvency processes, investigations, forensic accounting and director support.
- National experts with local knowledge across the UK. With offices throughout the UK, we understand the needs of all types of business and work closely with regional accountants and solicitors.
- Trust and transparency. Our advice is honest, clear and grounded in decades of experience. We offer a free, confidential meeting at no cost unless we are formally engaged.
Let us help you - Book a free 1-2-1
If your company is struggling with unmanageable debts, decreased cashflow or concerns about about your company’s future, we can assess your situation and provide you with tailored solutions and options.
During your free initial advice meeting, we will discover a true picture of your company’s financial situation
and offer practical and expert guidance on your next steps.
Initial meetings can be held at our office or your premises and are completely confidential.
There is no charge for this meeting – charges only apply if and when terms of engagement have been agreed.
How we work with accountants and solicitors
Accountants and solicitors regularly refer clients to us because they trust our approach. We provide:
- Clear, early-stage guidance to help protect their clients
- Specialist support in complex insolvency issues
- Collaborative working, with transparent communication
- A fast, thorough assessment so clients understand their options
If you’re an adviser representing a client in difficulty, we can help your client navigate the process and protect their position.
Case studies: real outcomes for real businesses
Our team has helped hundreds of directors stabilise, restructure or close their companies safely. Explore our case studies here >
Helpful guides & resources
To help you understand your options, we provide:
Company Insolvency FAQs
What should I do if I think my company is insolvent?
If you believe your company may be insolvent, the most important step is to seek professional advice immediately. Acting early protects your position as a director and gives you more options. You should:
1. Stop taking on new credit you can’t repay. Recklessly continuing to trade whilst insolvent can expose you to personal liability.
2. Assess your current cash flow and liabilities. Look at overdue HMRC payments, supplier pressure, maxed-out borrowing and upcoming bills. These are key indicators used to determine insolvency.
3. Avoid repaying one creditor over another. This could be seen as a preference which an insolvency practitioner may have to unwind later.
4. Speak to a licensed insolvency practitioner. At McTear Williams & Wood we offer a free, confidential meeting where we:
– review your financial position;
– explain whether the company is insolvent;
– outline all legal options (rescue, restructuring or closure);
– help you avoid personal risk as a director;
Only one in four initial meetings leads to a formal insolvency, so early advice does not automatically mean closure.
Can an insolvent company continue trading legally?
An insolvent company can in some circumstances continue to trade, but only if doing so does not worsen creditors’ position and is part of a clear, managed recovery plan.
A company may continue trading if:
- There is a realistic rescue or turnaround strategy
- Directors are actively seeking professional advice
- The business can meet new obligations as they arise
- Trading does not increase the deficit to creditors
A company should not continue trading if:
- Debts are mounting with no recovery plan
- HMRC arrears are growing
- Directors know they cannot pay suppliers or wages
- Taking on new orders will increase losses
If you continue trading when there is no reasonable prospect of avoiding liquidation, you could face:
- Wrongful trading claims
- Personal liability for company debts
- Director disqualification
- Potential allegations of breach of duty in more serious cases
Getting advice early significantly reduces these risks. We help directors understand whether limited trading is acceptable, how to safeguard themselves, and what steps must be documented.
What are the main options for an insolvent company, and how do I choose the right one?
When a company becomes insolvent, there are several formal and informal routes available. The right option depends on the viability of the business, creditor pressure and your objectives as a director.
1. Business rescue options
Best with early intervention when the underlying business can still be saved.
- Time To Pay (HMRC) – negotiate a breathing space to bring arrears under control.
- Company voluntary arrangement (CVA) – repay debts over time while continuing to trade.
- Administration – protects the company from legal action while turnaround or sale options are explored.
2. Closure options
For companies that cannot continue or where debt levels are no longer manageable.
- Pre-pack administration – immediate sale of the business and assets where appropriate.
- Creditors’ voluntary liquidation (CVL) – the most common and director-led method of closing an insolvent company.
- Compulsory liquidation – forced by a creditor via court action (usually HMRC)
There is no single solution that fits every business; the path you take depends on your specific financial situation and whether the core business remains viable.
In this video, we walk you through each option and the initial steps to stabilise your business.
If you are still unsure on the best option for your business, we offer free consultations to walk through your options, explaining the implications clearly so you can make the safest, most practical decision.
How to choose the right route
A licensed insolvency practitioner should review:
- Whether the business is viable
- Creditor behaviour (especially HMRC)
- Cash flow forecasts
- Whether trading should continue
- Your personal exposure as a director
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