Any company operating on the market is at risk of bankruptcy. Periodic insolvency can happen to anyone.
But it can take a very dangerous form, and then the entrepreneur should know how to act and when to declare bankruptcy.
Contrary to popular beliefs, big companies and small business people can be declared insolvent. The provisions apply to: limited liability companies and non-business stock companies; members of commercial companies who are liable for the obligations of the company without limitation of all property; partners of the partnership.
The main incentive to declare bankruptcy is its insolvency. However, failing to pay the due date will result in a condition for bankruptcy.
Current defaults, which may occur in case of late payment of up to one customer of a given company, resulting in lack of funds to pay the company’s liabilities towards its suppliers. It is important to capture the moment when insolvency takes on the nature of long-term, persistent insolvency, which can have far greater negative consequences for the company.
When declaring bankruptcy, you can propose a solution by way of an arrangement. The premise of the court’s acceptance of the resolution system will first of all demonstrate the likelihood that the continuation of the business will allow for a higher satisfaction of creditors than its liquidation.
An arrangement may be proposed by both the debtor and the creditor, depending on which one of them applies to the bankruptcy court. In the case of consent to the recovery agreement, the management of the property remains in the hands of the debtor, but the proceedings are controlled by the court supervisor. If, on the other hand, the debtor goes bankrupt, the debtor loses the right to manage his property to the trustee.