Why these twelve.
The list comes from decades of insolvency case law, the pattern a court assembles when it decides, after the fact, when a company crossed the line. Directors get no such hindsight, which is why the law judges the pattern, not any single tick. Overdue tax sits high on the list for a reason: the ATO is usually the creditor a struggling business stretches first, and the one with the sharpest collection powers when it stops waiting.
What to do with your count.
A low count is a maintenance job: keep lodgments current and cash flow visible. A middle count is the moment safe harbour was written for, protection while you run a real turnaround. A high count means the formal tools, small business restructuring or voluntary administration, should be on the table this week, chosen on your timeline rather than a creditor's.
Common questions.
What is the legal test for insolvency in Australia?
A company is insolvent when it cannot pay all its debts as and when they fall due. It is a cash flow test decided on the whole picture, not a single ratio, and courts weigh indicator patterns like the twelve on this page when deciding it.
Why does it matter exactly when a company became insolvent?
Because directors can be personally liable for debts the company incurs while trading insolvent. The earlier the insolvency date, the bigger the exposure window. Acting at the warning-sign stage, and documenting it, is what keeps directors on the right side of that line.
I ticked a lot of these boxes. Is it over?
No. A high count means the window for the widest options is closing, not closed. Safe harbour protection, small business restructuring and voluntary administration all exist for companies at exactly this point, and each rewards moving early. The result to fear is the one you never looked at.
Does being insolvent mean the company must be liquidated?
No. Insolvent or near-insolvent companies restructure and recover through payment arrangements, small business restructuring and deeds of company arrangement regularly. Liquidation is the right ending only for a company with no viable future in its current form.
The assessment and everything on this site is general information, not financial, legal or insolvency advice. Your result is a guide to how urgent your situation looks, not a formal opinion on solvency. Outcomes depend on your circumstances and no outcome is guaranteed. Formal insolvency appointments are made by registered practitioners we work alongside.