A business lawyer can help in various types of matters ranging from establishing the business to handling the affairs amounting to insolvency. The term insolvency means inability of a business to clear the debt and liquidate the business in various ways to get respite from the debtors. Here are some of the important acts of insolvency that a failing business need to perform.
- Selling off the assets: A company has physical assets such as infrastructure, equipment, intelligence, software, etc. It can sell off these assets to raise money and reduce the debt. It involves transferring the property to a third entity and pay the creditors.
- Committing a fraud: By committing a fraud, a business receives benefits way more than what it is entitled too. On detection, it may need the insolvency lawyers Mumbai to defend. The business may have sold the asset or property that it does not own rightfully in the case of a fraud.
- Hiding away or absenting: A business owner is branded as insolvent when it simply departs the business and stays out of touch of the creditors. He may resort to escaping to a foreign country to cut the communication and go into seclusion.
- Filing for insolvency: When the business income comes out to be too small to cover the debts, the owner may file for insolvency with the help of a business lawyer. The lawyer looks over all aspects to ensure that the condition is right for filing for insolvency.
- Imprisonment: A business owner may be serving the sentence in the prison as a result of a court order or due to losing a case. In this case, the amount at stake is quite big and affects the lives of the stakeholders badly. The insolvency lawyers Mumbai may challenge the decree if there is a slight chance to avoid or if the punishment is not proportionate to the offense.
Insolvency is a bad phase. It is better to follow the safe and sound business practices to avoid such situation. Follow the tax rules, the Company Law, etc. and remain in good books always.