2 min read
Definition
A company is solvent when it can pay its debts as they fall due and its assets exceed its liabilities; it is insolvent when it cannot. The distinction carries serious legal duties for directors.
In plain terms
Solvent means you can meet your bills and are worth more than you owe. Cross into insolvency and directors' duties shift to protecting creditors, not shareholders — a critical line to watch.
Why it matters for your company
Recognising the approach of insolvency early lets directors act — through working-capital finance, restructuring or advice — while options remain. Trading on while insolvent exposes directors to personal liability. Vigilance here is a core duty.
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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.