Factors for creditors to consider that suggest a company is insolvent

The following list is a non-exhaustive list of factors that could indicate that a company is or was insolvent:

• outstanding taxes & other unpaid statutory obligations
• instalment arrangements with the ATO
• the company having difficulties paying suppliers and third-parties
• payments to other suppliers outside of normal terms
• suppliers placing the company on stop supply
• suppliers insisting on COD, or request for immediate part payment of a debt before resuming supply
• circumstances involving bounced, dishonoured and post-dated cheques
• knowledge of any other creditors threatening legal action against the company for late or non-payment
• legal documents served on the company informing them of the insolvency
• difficulty in paying the wages or salaries of staff
• public information indicating any trouble with the company’s ability to pay creditors or staff
• available information of any bank refusing the company or unwilling to extend further credit
• report of any maxed out overdraft and credit cards
• any indication that there was a poor relationship between the company and their present bank or financier including refusing to provide further debt
• any information available that the company had no access to alternative finance
• knowledge of any existing special arrangements with selected creditors (to show preference)
• any payments made of rounded sums, which are not reconcilable to specific invoices.
• any solicitors’ letters, summons, judgments or warrants that were issued and made public against the company
• investigation of the ability of the company to produce timely and accurate financial information to display the company’s trading performance