Company bankruptcy: What you need to consider
Bankruptcy is when companies are no longer able to pay their debts. It can be initiated by either the company or its creditors.
Bankruptcy occurs when a company finds itself in excessive debt; that is, when the value of its property, its assets, no longer covers the total amount of its debts. If the board of directors has good reason to believe that the company has reached this situation, it is required to notify the courts (Art. 725 CO). Bankruptcy can also be initiated by an external creditor. In fact, any legal proceedings automatically result in initiation of bankruptcy, barring a few exceptions (Art. 43 LP).
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Consequences and effects of bankruptcy
Bankruptcy has serious consequences for entrepreneurs and their employees. It is a question of learning lessons and bouncing back with new ideas.
Filing for bankruptcy: the process
How do you file for a company’s bankruptcy? The procedure firstly involves a court, followed by close collaboration with the bankruptcy office.
The bankruptcy process
From the bankruptcy ruling onwards, how does bankruptcy progress? Liquidation of the company starts at this point, ending with its deletion from the trade register.
Bankruptcy as a result of defects in the organization of the company
This type of bankruptcy usually occurs when the company has already ceased trading. It is therefore not important from an economic perspective.
Personal bankruptcy: The circumstances
Any person, trader or otherwise, can declare themselves heavily in debt before a court. The court can then initiate bankruptcy proceedings.