For individuals who are a mountain of debt amassed and see no way to reduce this on their own, which is personal bankruptcy is often the only option to find a way out of debt. However, this simplified insolvency procedure is only open to private individuals. Even former self-employed persons who have a maximum of 19 creditors and against whom there are no longer any claims arising from self-employment can go through private insolvency.
For companies that can no longer pay their bills, according to bankruptcy law, however, the company bankruptcy – officially called rule insolvency – provided. As part of the insolvency proceedings , the company is either liquidated, ie dissolved or rehabilitated .
When do you have to apply for a corporate insolvency?
The InsO determines exactly when a company has to declare insolvent. There are three opening reasons for a company insolvency :
- Threatening insolvency
First general opening reason is the insolvency . According to § 17 Abs. 2 InsO, this is the case if a debtor is unable to meet his due payment obligations . This is normally to be assumed if he has ceased his payments.
Furthermore, the impending insolvency can also constitute the reason for opening a corporate insolvency . Pursuant to § 18 (2) InsO, this is the case if the debtor is in all likelihood unable to meet his existing payment obligations as soon as they become due.
Over-indebtedness occurs when the assets of the debtor no longer cover the existing liabilities, unless the continuation of the business is predominantly probable under the circumstances.
If the affected company is a corporation or a partnership with no personal liability , the following obligation exists: At the latest three weeks after insolvency or over-indebtedness, the responsible persons must register a company insolvency in accordance with § 15a Abs. If you do not, you can be guilty of bankruptcy . It faces a fine or imprisonment of up to three years.
Insolvency proceedings of a company: Which procedure is planned?
Many sufferers may now wonder how a corporate bankruptcy and its course are well regulated. Basically, the following phases have to be completed:
- Application and opening procedure
- insolvency proceedings
- Completion of the procedure
The process of insolvency proceedings for companies begins with the registration. This takes place at the local competent district court, which acts as a bankruptcy court . The responsibility results from the seat of the enterprise.
If the application for insolvency has been filed, the competent court will examine whether all conditions are met in order to open insolvency. For this purpose, one of the opening reasons already mentioned must be present. Furthermore, there must be sufficient recoverable assets to cover the costs of the insolvency proceedings . These include, for example, the court costs and the remuneration to which the insolvency administrator is entitled. If this is not the case, the application will be rejected for lack of assets .
In the actual insolvency proceedings , a bankruptcy administrator appointed for this purpose takes over the management of the company . The attachable assets in the company are confiscated and the debtor can no longer dispose of them. Instead, the power of disposal passes to the insolvency administrator. An alternative is to apply for self-administration bankruptcy.
In the process of insolvency of a company, the task is either to liquidate or to restructure the company . How this works is explained below.
The expected duration of a company insolvency can hardly be predicted at a flat rate . Influencing factors include the size of the company and the number of creditors . The situation is different with natural persons, ie self-employed persons. These go through after the actual insolvency proceedings, the so-called good behavior phase, at the end of the residual debt exemption. This phase usually lasts six years, but can be shortened to three or five years.
Liquidation or reorganization: Can a company still be saved?
How the procedure for bankruptcy is to be expected for a company depends on many different factors. Of great importance is the decision as to whether the company can or should be dissolved or rescued.
The process may have the objective of selling the assets of insolvency firms and distributing the proceeds to the creditors . These steps are performed by the insolvency administrator. He terminates all existing contracts and at the end of the company insolvency the company is deleted from the commercial register .
However, the liquidator can also undertake remediation in various ways. The insolvent company for sale is a possibility. There is also the option of setting up an insolvency plan . Such a plan sets out measures to save the company.
If no insolvency administrator takes the helm, it is often also possible to carry out a company insolvency in self-administration , eg. B. in the context of a protective screen process . In this case, the original administration remains able to act and enforces the measures set out in a restructuring plan . A so-called administrator will be assigned to the responsible person who oversees the persons responsible.
Insolvency with sole proprietorships: Private insolvency is usually not possible for them. Private individuals and former self-employed persons with a maximum of 19 creditors can only go through private insolvency proceedings. However, in the case of the insolvency of a sole proprietorship, unlike other companies, the following must be observed: Sole proprietors can obtain a residual debt exemption . However, they are fully liable with their private assets.