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What is insolvent trading and should I worry about it?

Question

What is insolvent trading and should I worry about it?

Answer

Insolvent trading occurs when a company incurs debts when there are reasonable grounds to suspect that the company will not be able to pay its debts as and when they fall due. The directors of the company may be held personally liable for any unpaid debts incurred during the period that a company is insolvent. Note that the term 'director' in this instance may include persons other than those officially appointed as a director of the company.

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