If you are experiencing any cash flow issues in business, there are some scopes you can find to sustain in the competitive market. In some conditions, you may have to go ahead with the company liquidation advice.
The business industry is flourishing with an incredible range of innovative ideas these days. However, not all of them are finding equal opportunities to grow. In fact, statistics state that almost 90% of companies fail, mainly due to cash flow problems.
Companies that are not able to pay off their debts or financial obligations, may enter a state of insolvency. In such scenarios, experts advise companies to follow the procedure to strike off company Singapore to deal with financial obligations.
Those who are new to the concept of company liquidation are advised to go ahead with a few pieces of advice available from the experts below:
Company liquidation advice #1 – first warning signs you may realize easily
One of the most common signs you will see when your company is reaching insolvency is reaching the maximum limit of bank overdraft. If suppliers have started refusing credit and you are not able to present sufficient assets to get a secured loan for the short term. In case cheques of the company are bouncing time and again, it may cause problems with the suppliers and they may even take legal action against your business. Another warning sign of liquidation is when you are not able to pay off wages to the staff. In such situations, it is better to test if your business has become insolvent so that you can take relevant action with the help of legal experts.
Company liquidation advice #2 – test if your business is insolvent
The company is known to be insolvent if they are no longer able to handle debts and payments. There are a few tests that you can conduct to confirm this state:
- Cash flow test: If you find yourself reasonably unable to pay off debts in the future, it means you are failing the cash flow test. In case the creditors have imposed a 30-day term for making payment and you are failing to adhere to that, it means you are leading to the stage of insolvency.
- Balance sheet test: This test observes the likelihood value of business assets in comparison to liabilities. In order to determine this, you may need to take help from a trusted company liquidation advice. If your liabilities exceed the available assets, you may have insufficient funds even after selling all assets of the company.
Company liquidation advice #3 – is it time to strike off company Singapore?
If the above tests prove that your company is in a state of insolvency, it is good to consider striking off the business. It clearly means that your business has to cease trading activities immediately and not acquire any further debt. The licensed insolvency practitioner may help you to strike off company Singapore with relevant procedures. They are well aware of the local rules and regulations and can help you complete all formalities with ease. These experts can promise you the best outcomes while saving a huge amount of time.
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