What does bankruptcy mean?
- In bankruptcy, an unprofitable and insolvent company is terminated at the end of court proceedings.
- Bankruptcy can also be canceled for a valid reason.
Bankruptcy proceedings mean that an insolvent and unprofitable company is terminated at the end of court proceedings. The business owner can file for bankruptcy himself or one of the company's creditors can do it. The court appoints an administrator who handles the administration of the bankruptcy estate and represents the estate. Bankruptcy can also be canceled for a valid reason.
In bankruptcy, the company is no longer allowed to manage its own assets. The court appoints a receiver for the bankruptcy estate who manages the company's assets. The liquidator turns all the assets of the company into money and distributes the money to the creditors.
After bankruptcy proceedings, the Patent and Registration Board receives information about the matter and enters it in the trade register. At the same time, the company usually dissolves, so a separate notice of termination is not needed.
A company can also file for bankruptcy on its own initiative. This is a better option than waiting for the creditors to file for bankruptcy.
If the company is unprofitable, managed bankruptcy initiated by the entrepreneur is a good solution.
The advantages of early bankruptcy include, for example,
- The guarantors of the company's possible loans can avoid the loss of property
- The company will not take on any more debt
- Company owners and responsible persons can avoid the consequences of possible unintentional negligence.
- The risk of the business owner being banned from doing business is reduced
What must the bankruptcy application contain?
The free-form bankruptcy application must include, for example:
- Why is the company filed for bankruptcy
- Company name
- Y ID
- Applicant's contact information
- Why does the matter belong to the court of that region
- Attached an extract from the trade register
Furthermore, the application must include a document stating the reason for the bankruptcy, for example a statement of debt.
If the company owner himself files for bankruptcy, the application must also include the board's decision to file for bankruptcy, as well as a statement of the company's assets and debts and creditors with contact information.