Personal injury specialist Claims Direct is to file for administration at the High Court today after running out of money.
The company said it could be "trading insolvently" within weeks and needed time to restructure or find a buyer for the business.
A decision is expected within a few days and a spokesman said it was too early to determine what may happen to the Telford-based firm's 140 staff.
Claims Direct warned last week it needed further funds to secure the future of the business despite selling three subsidiaries for £2.9 million.
It said today: "Regrettably, discussions with several parties to raise this additional capital have been unsuccessful."
The statement came just hours after Claims Direct's shares were suspended in the City pending clarification of its financial position.
If granted, the administration order will mean the company has roughly three months to find a solution to its current problems.
The company has suffered from lower than expected numbers of new compensation cases and delays in arranging new insurance cover for clients.
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