There are two tests for a company being insolvent:
(i) The company is unable to pay its debts as they fall due - this is known as “cash-flow insolvency” or “commercial insolvency”; or
(ii) The company’s liabilities (including future and contingent liabilities) exceed its current assets - this is known as “balance-sheet insolvency”.
Where an insolvent individual is “unable to pay its debts as they fall due” that individual is insolvent. Individuals are made bankrupt when a bankruptcy order is made against them by the court.