Financial problems or insolvency

An assessment of the financial state of a not-for-profit organisation can be a complex process and it is sometimes difficult to determine the solvency of a community organisation simply by looking at its financial accounts. A range of factors (not just one) will be relevant to an assessment of an organisation's solvency.

Not-for-profit community organisations may face financial difficulties for any number of reasons, and often it may be external forces such as economic trends that cause strain on an organisation’s financial position. Whatever the cause, all organisations need to be aware of the possibility and consequences of insolvency.

The below fact sheet explores these issues further.

Fact sheet: Financial problems or insolvency

This fact sheet provides information for Victorian incorporated associations and companies limited by guarantee that might be facing financial difficulties, or are concerned about their finances. Topics include:

Common terms
What is insolvency?
How can the Committee protect against insolvency?
Does the Committee have a duty to prevent insolvent trading?
What are the consequences of breaching duties?
What can we do if our organisation is facing insolvency?

Please click the below link to view our fact sheet on financial problems and insolvency.

Fact sheet: Financial Problems or Insolvency (78.3 KB)

Related resources

PilchConnect resources

For further information on the financial reporting requirements for Victorian community organisations, see Running the organisation > Financial reporting.
For further information on the duties of Committee of Management members in an incorporated association, see The people involved > Positions in an incorporated association.
For further information on the duties of directors on the Board of a company limited by guarantee, see The people involved > Positions in an company limited by guarantee.

Content last updated: 10/02/10