In contrast to personal bankruptcy, there is regular bankruptcy. Because entrepreneurs also have the opportunity to file for bankruptcy with their company. If this is the case, one speaks of corporate bankruptcy.
A special insolvency procedure is used for such corporate insolvency. The aim of this is to free the bankrupt company from its debts or to manage it after over-indebtedness and then to reorganize it.
Process of a corporate bankruptcy procedure
But how does such an insolvency procedure actually work? Who is responsible for implementation and are there any differences in terms of the type of company?
Three stages of corporate bankruptcy
The procedure for standard insolvency normally takes place in three consecutive phases. It begins with filing the application for bankruptcy, followed by an opening procedure and finally ends with the actual bankruptcy procedure.
Application to open insolvency proceedings
Before a regular procedure can even be initiated, a corresponding application must of course first be made. You have to submit this to the bankruptcy court, which is usually represented by the local district court. Depending on the type of company, the responsibility depends on the place of residence of the entrepreneur or the company’s headquarters.
Legal forms such as GmbH, GmbH and Co. KG as well as AGs are absolutely obliged to notify bankruptcy promptly if there is a reason for insolvency in order to avoid fines.
After the application has been made and checked by the bankruptcy court for admissibility, the court will initiate measures with the aim of protecting the company’s assets. For this purpose, a short-term insolvency administrator is usually smuggled in, who tries to secure the company’s assets as much as possible by confiscating valuable objects.
Sometimes a creditors’ committee is also included in the process.
As soon as all preparations have been made, the standard procedure is initiated by resolution. On the other hand, it can still be rejected if the assets still available are not sufficient to at least cover the projected procedural costs.
The first step in the standard procedure is for the bankruptcy court to appoint a final liquidator. However, if you have applied for self-administration, you can take over the tasks of the administrator yourself. The main thing is to protect the rest of the company’s assets with the right measures so that ultimately all creditors can be satisfied.
To do this, all creditors must enter their claims in an insolvency table before they are subsequently summoned to an examination. Only the claims that are legally binding after examination remain and the associated creditors are appointed to part of the creditors’ meeting so that they have a say in all measures for reorganization or liquidation.
Finally, the insolvency administrator must provide an overview of the course of events to date on a regular basis and at least every six months. If the decision is made to liquidate the company, the administrator takes care of the sale of all assets in order to finally use the profit to settle the claims of the creditors.
End of bankruptcy proceedings
After all creditors have been satisfied and the company has been restructured or sold, the insolvency administrator must submit a final report to the bankruptcy court. A final date will then be decided there and the insolvency proceedings officially ended.
If the company was liquidated, it will eventually be deleted from the commercial register.
If, however, a restructuring has taken place and there is still capital left after all claims have been satisfied by the creditors and the costs of the proceedings have been covered, the entrepreneur may freely dispose of it.
More information on corporate insolvency at Projektify
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But even if you just need more information about bankruptcy, you can here learn more.
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