Voluntary insolvency is the procedure that is unlawful in the legal history. Trading while insolvent is the process that affects the directors to be liable for the company’s debt. There are no much companies that were liable to this process. It is actually referred to as the worst phase in the business lifespan. The directors are the one who have to make the whole responsibility of the company debts. The responsibility of the directors may change from the shareholders to the creditors in such process. In such occasions the directors of the company will have to consider whether to continue the business or not. They have to figure out the personal loss and the future loss if they continue with the same company. So there decisions should be wise enough before submitting the rest of the procedures. If the companies decision is to take the same company and to run in the future buy doing the same trade it has all the possibilities to increase the company debts.
There are many benefits associated with the voluntary insolvency of the company. It will have the cash flow very quickly to the company and will not have the pressure from the tax payable authorities. The petition will get adjourned and it rapidly cut the costs. It can also terminate the property lease obligation associated with the company. It can also remove the directors and the employments under no issues contract. The creditors can retain their customers and receive their debit back over time
The main disadvantages related to this process is that the company will have to close down to and if you feel like going back to the same business you will have to start up a new company formally. If you wish to keep the company assets, you cannot get it for free; rather you will have to buy them inured to possess it.