In order to succeed in the business world, one needs to have sufficient amount of capital to facilitate the operations to be carried out. There are instances when the business does not have sufficient funds which lead them to seek out loans. This is generally how the business world operates in order for constant profits to achieved. Business insolvency refers to a scenario where the resources in the business are not able to repay debts within a certain time. It could also mean a balance sheet insolvency where the liabilities are more than assets as per the balance sheet. When a company is in such a scenario, they face a danger of being shut down.