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| The statutory definition of [[insolvency]] in the UK appears at Section 123 of the [[Insolvency Act 1986]], and reads thus.
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| Quick note: Section 123(1)(e) is [[cashflow insolvency]], and Section 123(2) is [[balance sheet insolvency]].
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| {{box|
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| '''123 Definition of inability to pay debts. '''
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| :(1) A company is deemed [[unable to pay its debts]]—
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| ::(a) if a creditor (by assignment or otherwise) to whom the company is indebted in a sum exceeding £750 then due has served on the company, by leaving it at the company’s registered office, a written demand (in the prescribed form) requiring the company to pay the sum so due and the company has for 3 weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor, or
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| ::(b) if, in England and Wales, execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part, or
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| ::(c) if, in Scotland, the induciae of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made, or
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| ::(d) if, in Northern Ireland, a certificate of unenforceability has been granted in respect of a judgment against the company, or
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| ::(e) if it is proved to the satisfaction of the court that the company is [[unable to pay its debts as they fall due]]<ref>This is [[cashflow insolvency]]</ref>.
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| :(2) A company is also deemed [[unable to pay its debts]] if it is proved to the satisfaction of the court that the value of the company’s assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities. <ref>This is “[[balance sheet insolvency]]”.</ref>
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| :(3) The money sum for the time being specified in subsection (1)(a) is subject to increase or reduction by order under section 416 in Part XV.
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| }}
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| ===See also===
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| *[[insolvency]]
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| *{{isdaprov|bankruptcy}} - the {{ISDA}} term
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| *[[cashflow insolvency]]
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| *[[balance sheet insolvency]]
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