Typically, bankruptcy proceedings are resorted to if a person is unable to repay his debts to creditors. That is why the optimal method of liquidating an LLC is by declaring it bankrupt. This can be done if the manager, within 3 months from the moment the obligation to pay the debt arises, cannot pay it off, and the amount of the debt is at least 100,000 rubles. Bankruptcy is the only legal and legal way to avoid claims and liability for debts. It is believed that the liquidation procedure will be completed after the legal entity is excluded from the Unified State Register of Legal Entities.
- How is bankruptcy useful for an entrepreneur?
- What is the procedure for liquidating an LLC in this case?
- What are the consequences of declaring a company bankrupt?
Before answering these questions, you should understand why bankruptcy often becomes the only way out of the situation when it comes to liquidating an LLC?
What it is?
Despite the fact that liquidation and bankruptcy of an enterprise are different procedures, they can occur together.
The first step is bankruptcy, the main purpose of which is to repay debts to creditors.
After its completion, liquidation is carried out - the complete cessation of the activities of the legal entity.
It is customary to distinguish several types of procedures:
- In general order.
- At the request of the creditor or the debtor directly.
- In a simplified manner.
What is the difference?
It was already noted above that bankruptcy is not liquidation - these are two completely different procedures.
They differ in that recognition of insolvency is an opportunity to restore the business and regain the ability to pay.
To do this, several stages of the procedure are carried out, including:
- observation;
- health improvement;
- external management;
- bankruptcy proceedings.
Moreover, bankruptcy, unlike liquidation, is used in cases where debts to creditors are repaid.
Liquidation takes much less time and is not associated with the same costs as in bankruptcy.
JSC bankruptcy procedure
In closed joint stock companies, the owners of the enterprise's securities are the founders of the organization or a limited circle of persons. The activities of a closed joint stock company are associated with business risks in the same way as companies of other organizational and legal forms. The reason for opening a bankruptcy case may be insolvency that persists for a long period. How does the bankruptcy procedure proceed and what features are established for closed companies issuing shares?
Signs of insolvency of a closed joint stock company
Declaration of bankruptcy of closed-form organizations is carried out on the basis of the same principles as for companies of other types (Article 3, 6 of Federal Law No. 127):
- The total volume of claims exceeded the amount of 100 thousand rubles;
- The delay is more than one financial quarter (3 months).
The case is within the jurisdiction of the arbitration authority at the place of registration of the company with the tax office. The following may submit an application indicating the name of the self-regulatory organization to select a manager:
- Federal Tax Service of the Russian Federation;
- Workers;
- Suppliers, service providers, credit organizations, other counterparties;
- The debtor himself immediately after discovering the fact of insolvency.
The order of debt repayment in case of bankruptcy of a closed joint-stock company
According to Article 64 of the Civil Code of the Russian Federation, payments upon declaration of insolvency are made in order of priority:
- The first is for obligations in connection with causing harm to health and moral damage;
- The second is for wages and severance pay, as well as original projects;
- The third is for collections to the treasury and extra-budgetary funds;
- The fourth is for commercial transactions and other requirements.
Payments are made sequentially, so if there are insufficient funds, the money will be used primarily to cover debts in the first and second order. The exception is payments secured by a pledge of the assets of the liquidated organization. Funds to cover them are obtained from the sale of property or through the assignment of rights by offset.
Peculiarities of bankruptcy of a closed joint-stock company
Part of the rules for conducting the procedure for declaring an organization insolvent applies to closed joint stock companies.
Under Article 3 of Federal Law No. 208, subsidiary liability may be imposed on the founders of an organization. The debts of the enterprise will be covered at the expense of their personal funds or property if their guilty behavior is established and the company is brought to a state of insolvency. The proceeds are included in full in the bankruptcy estate, used to pay off obligations to counterparties.
In case of insolvency of a subsidiary, the main company bears additional responsibility. Shareholders of a subsidiary have the right to demand compensation for losses caused by the fault of the parent company, within the limits of subsidiary liability.
If signs of insolvency of the CJSC are detected, the management of the company loses the right to:
- Reduction of authorized capital;
- Payment of funds for obligations;
- Sales of equity securities;
- Announcing and making decisions on the receipt of dividends by shareholders.
Measures in case of bankruptcy of closed joint stock companies
Conducting a preliminary audit of the organization's legal and financial documents will help prevent the negative consequences of bankruptcy. In order to prevent insolvency, it is recommended to take the following measures:
- According to the analysis of accounts receivable of the closed joint-stock company;
- According to the assessment of the debtor's property assets;
- By calculating the prospects for introducing bankruptcy proceedings;
- On inclusion of creditors' claims in the register;
- For collection of accounts receivable.
The insolvency of an enterprise means the inability to repay both fixed and current payments. If the company’s profitability cannot be restored as a result of implementing the financial recovery plan, then bankruptcy proceedings are initiated. This last stage means the sale of assets to pay off debts to an acceptable extent. The activities of the company cease completely from the moment information about liquidation is entered into the Unified State Register of Legal Entities.
Liquidation through bankruptcy
For business owners who are experiencing the collapse of their own business, liquidation through bankruptcy is not always pleasant; it is often even associated with psychological problems.
Developments in this direction occur only when:
- large debts to creditors;
- impossibility of restoring the company's solvency or saving it.
Enterprises
When liquidating an enterprise through bankruptcy, in general, the debtor is recommended to independently file a statement of claim to initiate proceedings.
In order for it to be accepted for consideration, you will need to attach a package of documents and make sure that the debts comply with the requirements established by law.
To implement bankruptcy, the availability of material resources is required, therefore, before filing an application, the debtor must make sure that they are available.
After 30 days from the date of filing the application, the court hearing begins.
It introduces the first stage - observation, the duration of which is about seven months. This stage is characterized by the fact that the manager’s powers are reduced (Article 62 of Federal Law No. 127).
The arbitration manager receives not only them, but also carries out a number of other activities:
- analyzes the state of the enterprise;
- checks for signs of fictitious or deliberate bankruptcy;
- makes proposals aimed at further carrying out the procedure;
- organizes a meeting of creditors.
After observation, the next stage of the process is introduced - recovery.
It is based on drawing up a special debt repayment schedule.
It must be accepted by the meeting of creditors, and only after that can it be executed.
The third stage is external management, for the implementation of which an external manager is appointed (in accordance with Article 93 of Federal Law No. 127).
If before this the main powers of management and management bodies were retained, now they belong to the candidacy of the manager.
He has the right to cancel all previously taken measures to restore solvency if they are ineffective.
A sample application for bankruptcy of a company is here.
Credit organizations
The final stage for both credit institutions and enterprises is bankruptcy proceedings.
Its purpose is to sell the debtor’s property in order to obtain material resources and repay the debt.
It is important that there is a list of exceptions - items that cannot be alienated.
These include:
- living space, if it is the only place of residence for the debtor’s family;
- means for professional activities;
- food, food;
- cloth;
- livestock, etc.
A sample application for bankruptcy of a credit institution is here.
As for the specifics of bankruptcy of credit institutions, it is important to note the need for the initial revocation of the license by the Central Bank.
Only after this can a bank insolvency procedure be introduced.
There are features of bankruptcy of insurance companies. What are the risks of enterprise bankruptcy? See here.
OOO
Bankruptcy of an LLC is carried out only with the appointment of managers - arbitration, bankruptcy, external.
Their powers differ at each stage of the procedure, but they have the same purpose:
- restoration of the enterprise's payment ability;
- settlement with creditors.
The debtor independently pays the manager's salary, and his candidacy is appointed by the arbitration court.
How is it carried out?
You can always choose the full or simplified order. The full bankruptcy procedure involves going through the following stages:
- Filing an application to declare the LLC bankrupt.
- Conducting a court hearing, as a result of which a monitoring procedure is introduced against the debtor for 7 months. At the same time, an arbitration manager is appointed.
- The manager makes a decision on the absence or presence of signs of fictitious bankruptcy. The decision may be approved or contested by the meeting of creditors.
- Bankruptcy proceedings are carried out with the formation of the bankruptcy estate. All debts are written off and considered outstanding.
- A legal entity ceases to exist, and the grounds for liability of its managers disappear.
The full bankruptcy procedure takes 12 months or more.
Simplified bankruptcy has the following differences:
- It can be initiated after the official liquidation has begun. To do this, you must first contact the arbitration court with an application.
- The first and only stage in simplified liquidation is bankruptcy proceedings.
The terms are reduced to 9 months.
Which scheme is the most effective? The final choice can be made by analyzing a specific situation. Remember that bankruptcy is not an easy procedure, and therefore the help of a lawyer is indispensable in any case.
Simplified procedure
The simplified procedure allows for the recognition of insolvency of a legal entity in a short time.
Its peculiarity is that it can only begin after the liquidation of the enterprise has been initiated on the basis of the Civil Code of the Russian Federation.
Conditions
One of the conditions for a simplified form of bankruptcy is not only the need to liquidate the enterprise, but also the initiation of the procedure by the debtor himself.
He can do this in two cases:
- the time for performing duties is overdue;
- when creditors do not have the opportunity to independently provide decisions of the court or authorities that have entered into force.
Stages
The difference with the general bankruptcy procedure is that the case begins immediately with bankruptcy proceedings.
There are no first stages during which attempts are made to restore payment capacity so that the legal entity can again carry out economic activities.
Documentation
For a simplified bankruptcy procedure, the following documents will be required:
- A paper confirming the start of liquidation.
- Statutory documentation of the enterprise.
- Certificate of registration, Certificate of registration with the Federal Tax Service, extract from the Unified State Register of Legal Entities.
- OGRN certificate.
- Bank statements about the status of personal accounts.
- Tax documents of the enterprise (this also includes financial statements and all information about transactions for the last three years).
Deadlines
The duration of the simplified bankruptcy procedure is from 9 months.
If recognition of insolvency is carried out in a general manner, then it will drag on for several years, since established deadlines are allotted for the implementation of each stage.
You should be aware of the consequences for shareholders in the event of bankruptcy of a construction company. How to file for bankruptcy of a debtor? Read here.
How to file bankruptcy for an individual entrepreneur? Step-by-step instructions in this article.
