Bankruptcy of legal persons
Bankruptcy of legal entities is a natural part of the business world. However, the society still tends to identify it with defeat, forgetting that it is a normal economic phenomenon and a possibility to start a business from scratch. The declaration of bankruptcy may save you and your business from the burden of debt for life.
Any company may become bankrupt. Many of the world’s most famous businessmen have become bankrupt several times during their careers, but have managed to recover, re-create their businesses and achieve an even greater successes.
Bankruptcy is a state where either a company is declared bankrupt by the court, or the creditors perform bankruptcy proceedings out of court. In the first case, an administrator is appointed, the case is heard and the main decisions are made by the court. This process typically takes one to two years or more, depending on the complexity of the case, can be expensive and require a lot of time and energy.
A great alternative is bankruptcy proceedings out of court. This option can be chosen if no court proceedings have be started against the company with regards to property claims and if no writs of execution have been enforced against the company in courts or other bodies.
A timely bankruptcy process will help avoid more serious financial problems, protect the interests of creditors and maintain relationships with former business partners. Seeing that company’s condition has become critical and further operation would only make things worse, its head may contact creditors seeking their agreement to recognise the company bankrupt with this process being performed out of court.
It is shorter, more efficient and less expensive, the administrator is appointed and all major decisions are made by the meeting of creditors; creditors have every opportunity to control the bankruptcy process. Further management of your company and its relations with creditors are taken over by an appointed bankruptcy administrator.
We understand that it may be difficult to part with a long-cherished business. However, let’s not forget that bankruptcy is not only an end, it can always be a beginning of something new.
For more information, please refer to http://www.bankrotodep.lt/