For the purposes of the Corporations Act 2001 (Cth) (CA 2001), a company is solvent if, and only if, it is able to pay all of its debts, as and when they become due and payable (section 95A, CA 2001).

For the purposes of the Bankruptcy Act 1966 (BA 1966), a person is solvent if the person is able to pay all the person's debts, as and when they become due and payable (section 5(2), BA 1966).

Whether a company or an individual is solvent depends upon a factual assessment of the circumstances impacting the particular company or individual. A company or an individual that is not solvent is insolvent.

For more information in relation to corporate insolvency, see Practice note, Corporate insolvency and related directors’ duties: When is a company insolvent?.