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the inability of an economic entity such as an enterprise, organization, or other juridical person to ensure paymeny of its fiscal obligations.

In the USSR, enterprises and economic organizations that fail to meet installments on bank loans or omit payments to the state budget and to their suppliers over a prolonged period are classified as insolvent. Insolvency is caused primarily by such shortcomings in economic operations as failure to fulfill production and financial plans or accumulation of excess production stocks. Inadequacies in material-technical supply to the enterprise can also be a cause of insolvency. Delays in receipt of earnings for products sold, unplanned receipt of production stocks, and transportation difficulties can also contribute to insolvency; these are temporary factors independent of the operation of the economic organization.

For capitalist companies, insolvency leads to bankruptcy and to the liquidation of the enterprise; the burden of the unemployment thus caused is ultimately borne by the working people. The socialist state intervenes vigorously in the operation of enterprises that are functioning poorly; while employing economic sanctions and bank audits, it also extends fiscal assistance in order to improve the work of the insolvent enterprise.


References in periodicals archive ?
Said Mr Wood: "Corporate insolvencies continue their long, slow decline from their peak in the recession.
Far fewer companies are going bust thanks to steady UK growth and rock bottom interest rates, with figures from the first quarter of 2015 showing that company insolvencies in England and Wales were at their lowest since the last quarter of 2007.
The rate of total personal insolvencies decreased by 14.
rate By contrast, corporate insolvencies in England and Wales posted a 12% quarterly increase in Q2 2013 and were 0.
com/ Since then, insolvencies have risen significantly in all areas, in part because of legislation making it easier for people to find these types of solutions to their debt problems and in part because of the growing financial problems.
PwC's latest analysis shows that the West Midlands saw the fourth highest number of corporate insolvencies during the second quarter of 2012.
There were 375 insolvencies in the hospitality and leisure sector in the fourth quarter of 2011 compared to 289 in the same quarter of 2010 according to PwC.
London's Kensington, Wimbledon, Richmond and Chelsea had the lowest concentration of personal insolvencies.
The total number of insolvencies in Austria is seen at 1,637, down 0.
We know from previous recessions that early recovery can be a dangerous time - insolvencies continue to rise even after a recession ends.
Relief was intended for insolvencies of companies that, at that time, wrote mostly personal lines policies in single states.
Thus, the right to terminate or close out financial market contracts is important to the stability of financial market participants in the event of an insolvency and reduces the likelihood that a single insolvency will trigger other insolvencies due to the nondefaulting counterparties' inability to control their market risk.