Corporate insolvency occurs when a company is unable to pay its debts as they come due. This situation can arise from various factors, including poor financial management, declining sales, or unexpected expenses. When a company becomes insolvent, it may seek to restructure its debts or enter into formal proceedings to address its financial issues. In many jurisdictions, corporate insolvency can lead to different outcomes, such as liquidation or bankruptcy. During liquidation, the company's assets are sold off to pay creditors, while bankruptcy may involve a court-supervised reorganization plan. Both processes aim to resolve the company's financial difficulties and protect the interests of creditors.