Insolvency

Insolvency is a business term meaning the inability of the business to pay its current obligations. There are two forms of insolvency, equity insolvency which is cash flow related and balance sheet insolvency whereby either current assets are less than current liabilities or total assets are less than total liabilities.

Insolvency – Detection

Insolvency

Insolvency refers to the ability to pay bills in a timely manner. It does not mean bankruptcy but long-term insolvency is a underlying factor of bankruptcy. Many owners and/or managers of small business have no idea of how to determine if the company is insolvent or headed towards the inability to meet their day to day obligations.

Cash Flow – Introduction

Cash Flow

Insolvency is defined as the inability to pay liabilities as they come due. To meet the demand of creditors cash is required. For most small businesses there are as little as a single source to multiple sources of cash.

Negative Basis in Business – Tax Shelters

Negative Basis in Business

Negative basis in business refers to the value of the equity investment in the company. It literally means you have no actual equity investment and worse you owe somebody money because other parties have fronted the necessary capital to make the business viable.

Form 1099-C: Cancellation of Debt

Form 1099-C

If you received a 1099-C, the first question you ask is: ‘Do I have to include this in my taxable income?’ Well, the answer is ‘it depends’. Not what you want to hear but there are a lot of variables involved in answering this question.

Insolvency and Bankruptcy – Know the Difference

Insolvency and Bankruptcy

Every business owner needs to know the difference between insolvency and bankruptcy. Often these two terms are misunderstood and improperly used in conversation. You need to know their correct meaning because both are used in civil law and both have different issues to address during the process. In addition, understanding these two terms builds a better comprehensive understanding of financing your business.

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