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Formal insolvency covers the official processes used when a business cannot pay its debts, including administration, liquidation (compulsory or voluntary), and arrangements overseen by the courts and the Insolvency Service. A solicitor acts for directors, creditors or the company, drafting petitions, appointing administrators or liquidators, negotiating arrangements with creditors, and advising on asset realisation, claims, and compliance with regulatory duties throughout the process.
