Director board advice record spreadsheet
When a company is in difficulty, the question a liquidator later asks the directors is rarely "what did you decide?" but "what did you know, and when?". This spreadsheet keeps the answer as you go: one dated row per board meeting, recording the two statutory solvency tests (cash flow and balance sheet, Insolvency Act 1986, s.123), the advice the board sought and received, where the board judged the company to sit, and what it decided and why. The creditor-interest column follows the Supreme Court's 2022 Sequana judgment: the duty to weigh creditors' interests is engaged once the directors know or ought to know the company is insolvent or bordering on insolvency, or that insolvent liquidation or administration is probable, and creditors' interests become paramount once it is inevitable. It sits alongside your formal board minutes, not instead of them. This is a record-keeping template and general information, not legal advice. BTI 2014 LLC v Sequana SA [2022] UKSC 25
Prefer Google Sheets or Numbers? Download the column headings as CSV and import them. The Excel version also carries drop-down lists, date checks, a how-to sheet and the legal references.
What goes in each column
- Entry no.. Number each entry in order. Never delete or renumber one; add a new entry to correct it.
- Date of meeting or decision. The date the board met or the decision was taken.
- Directors present. Every director present, and anyone else in attendance, such as the accountant.
- Information reviewed (and as-at date). What the board actually looked at: management accounts, a cash-flow forecast, the aged creditors list, the HMRC position. Give the date each is made up to.
- Cash-flow test result and basis. Passed, failed, doubtful or not assessed: can the company pay its debts as they fall due (Insolvency Act 1986, s.123(1)(e))? Then the figures behind the answer: who is overdue, by how long, and what cash is coming in.
- Balance-sheet test result and basis. Is the value of the assets less than the liabilities, counting contingent and prospective liabilities (s.123(2))? Use current figures, not the last filed accounts.
- Statutory demands, petitions or enforcement. A debt over £750 left unpaid for 3 weeks after a written statutory demand means the company is deemed unable to pay its debts (s.123(1)(a)). Record any demand, CCJ, winding-up petition or enforcement action outstanding.
- Creditor-interest position reached. Where the board judges the company now sits, A to D. The four positions are explained below.
- Advice sought: from whom, and when. Name, firm, and whether a Licensed Insolvency Practitioner, accountant or solicitor, with the date first contacted.
- Advice received, and when. What the adviser actually said, in their terms, whether it was in writing, and where it is filed.
- Decision taken. Continue trading on a stated plan, stop taking new credit, cease trading, convene the members, seek an appointment.
- Reasons, including how creditors’ interests were weighed. Why the board decided what it did, and how the interests of creditors as a whole were set against those of shareholders.
- Steps to limit loss to creditors. Concrete steps: no new credit, customer deposits ring-fenced, stock not sold below value, costs cut. This is what the wrongful trading defence turns on (s.214(3), and s.246ZB(3) in administration).
- Payments or transactions outside the ordinary course. Any payment to a particular creditor, director, relative or connected company, and any asset sale, with the reason. These are what a liquidator reviews as possible preferences or transactions at an undervalue (s.238 to s.240).
- Dissent or reservations. Any director who disagreed, and what they said.
- Next review date. When the board will look again. The worse the position, the shorter the gap.
- Minute reference. Where the formal minute is kept. Minutes of every directors’ meeting must be kept for at least ten years (Companies Act 2006, s.248).
The four creditor-interest positions
The spreadsheet asks the board to place the company in one of four positions each time it meets. They follow the four situations the Supreme Court distinguished in Sequana, and the point at which wrongful trading bites.
A Solvent, no real concern
Both tests pass with headroom. The directors’ duty is to promote the success of the company for its members (Companies Act 2006, s.172(1)).
B Real risk of insolvency, not probable
The Supreme Court held in BTI 2014 LLC v Sequana SA [2022] UKSC 25 that the creditor duty does not apply merely because the company is at a real and not remote risk of insolvency. Record why the board judged insolvency not probable, and keep testing.
C Insolvent or bordering on it, or an insolvent liquidation or administration is probable
The majority in Sequana held the creditor duty is engaged when the directors know, or ought to know, that the company is insolvent or bordering on insolvency, or that an insolvent liquidation or administration is probable. The directors must then consider the interests of creditors as a general body, balanced against shareholders’ interests, and the greater the company’s difficulties the more weight creditors get. Companies Act 2006, s.172(3) makes the ordinary duty subject to this rule.
D Insolvent liquidation or administration is inevitable
All five justices in Sequana agreed that at this point creditors’ interests become paramount. Lord Briggs put it at the point section 214 of the Insolvency Act 1986 is engaged: once a director knew or ought to have concluded there was no reasonable prospect of avoiding insolvent liquidation or administration, the statutory defence to wrongful trading is having taken every step to minimise the potential loss to creditors (s.214(3); s.246ZB(3) for administration).
Progress is not always one way. A refinancing or a large customer payment can move a company from C back to B, and the record should show that too, with the evidence.
A worked example
An illustration of how three entries might read for a small trading company. It is invented to show the method, not drawn from a real case.
Entry 1 (First entry)
- Solvency tests
- Cash flow: doubtful. Two suppliers paid late last month; VAT quarter due in six weeks with no cash set aside. Balance sheet: passed on current figures.
- Position reached
- B. Real risk of insolvency, not probable
- Advice
- None yet. Accountant asked to build a 13-week cash-flow forecast.
- Decision and steps
- Continue trading. No new credit lines. Board to meet weekly until the forecast is in.
Entry 2 (Two weeks later)
- Solvency tests
- Cash flow: failed. The forecast shows the VAT payment cannot be made on time and trade creditors are stretching. Balance sheet: doubtful once a disputed customer claim is counted as a contingent liability.
- Position reached
- C. Insolvent or bordering on it, or an insolvent liquidation or administration is probable
- Advice
- Licensed Insolvency Practitioner contacted; first meeting booked.
- Decision and steps
- Stop taking deposits for work not yet started. No payments to directors, their families or connected companies without a minuted board decision and reason. Buy only the supplies needed to finish existing orders, on normal terms, and minute each one.
Entry 3 (After the IP meeting)
- Solvency tests
- Both tests failed; the practitioner confirmed the company is insolvent on both bases.
- Position reached
- D. Insolvent liquidation or administration is inevitable
- Advice
- Written advice received and filed: the company should cease trading and the directors should convene the members to consider a creditors’ voluntary liquidation.
- Decision and steps
- Cease trading. Convene the members. Secure assets and records. Formal minute taken using the board minutes template.
Notice what entry 2 does: the moment the board judged the company to be at position C, it wrote down specific steps that protect creditors as a whole and stopped anything that favoured insiders. Those are the entries that matter most if the company later fails.
How to use it
- Fill it in at, or straight after, each board meeting. Record what the board actually saw and decided, including the uncomfortable parts.
- Never overwrite an old row. If something was wrong, add a new entry that corrects it. Save a dated copy after each entry so the history cannot be questioned.
- Take the formal minute as well. For the decision to take insolvency advice or convene the members, use the board minutes template.
- Not sure which way the tests go? Run the insolvency test and the cash-flow runway calculator, and if you are worried about personal exposure, the wrongful trading checker. Wrongful trading explained covers the law in more depth.
Copy this answer for AI / citation
Sources, all accessed 23 September 2026: Insolvency Act 1986 s.123, s.214, s.240, s.246ZB, s.389; Companies Act 2006 s.172, s.248; BTI 2014 LLC v Sequana SA [2022] UKSC 25, judgment and press summary of 5 October 2022. A record-keeping template and general information, not legal or insolvency advice; take the decisions it records with a Licensed Insolvency Practitioner.
Board advice records: common questions
Why keep a running record as well as board minutes?
Minutes record what was decided at one meeting. This record shows the sequence: what the board knew each time it looked, what it was told by advisers, and when its view of the company changed. If the company later enters insolvent liquidation or administration, the questions a liquidator or administrator asks about the directors are sequence questions: when did you know, and what did you do next. A log made at the time answers them far better than a reconstruction made afterwards.
When does the duty to think about creditors start?
In BTI 2014 LLC v Sequana SA [2022] UKSC 25 the Supreme Court held that the creditor duty is not triggered by a real but not probable risk of insolvency. The majority held it is engaged when the directors know or ought to know that the company is insolvent or bordering on insolvency, or that an insolvent liquidation or administration is probable. Once insolvent liquidation or administration is inevitable, creditors’ interests become paramount.
Does keeping this record protect me from wrongful trading?
Not by itself. Section 214 of the Insolvency Act 1986 judges a director against a reasonably diligent person with the knowledge, skill and experience expected of someone in that role, and with the director’s own (s.214(4)). The defence is having taken every step to minimise the potential loss to creditors once there was no reasonable prospect of avoiding insolvent liquidation or administration (s.214(3)). The record is evidence of what you did; it is the steps themselves that count.
Who should the advice come from?
An accountant can tell you what the numbers say. Only a qualified insolvency practitioner may act as liquidator, administrator or CVA supervisor (acting without qualification is an offence under s.389 of the Insolvency Act 1986), so once the record reaches position C a Licensed Insolvency Practitioner is the conversation to have. Record who advised, when, and what they said, including advice you decided not to follow and why.
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