Bankruptcy of legal entities as a forced measure

Formation and development of a market economy is accompanied by various, sometimes contradictory, processes that take place within the framework of the current legislation. As practice shows, bankruptcy of legal entities occurs for various reasons. In general, this procedure is regulated by the special Law "On Insolvency (Bankruptcy)". In its original form, this law was intended to ensure a more rapid transfusion of capital into those areas of activity that develop more dynamically.

To do this, you need to remove from the market enterprises that are not able to fulfill their obligations in the required amount. So that they, so to speak, did not interfere with stronger partners to supply the market with relevant goods and services. Weak management and inaccurate actions in the conduct of business can lead any enterprise into a deplorable state. I must say that this is not a legal term. The bankruptcy of legal entities as a mechanism is included under quite specific circumstances. If the company is barely making ends meet, this is not an excuse to run it.

However, in the event that within a certain period the enterprise can not fulfill its obligations, one of the interested persons may demand liquidation of the obligation. Such a person can be a state. This becomes possible when taxes and compulsory payments to public funds are not carried out for three months or more. For example, a pension fund can initiate this process. Bankruptcy of legal entities is possible only upon the decision of the arbitration court. It is to this court that an appropriate statement should be sent.

Often happens and so that the company is not able to pay off the suppliers of raw materials and components. In this case, the mechanism for initiating an insolvency or bankruptcy case looks similar. The interested person addresses in arbitration court which can make the corresponding decision. And this decision may not be what the plaintiff would like to receive. After the court reviews the application, the company introduces a procedure for monitoring. The court supervises the situation at the enterprise.

Practice shows that very often the company in such a state has debts for which it is still possible to pay off. But if the external situation does not improve the situation, then the decision of the same court appoints a bankruptcy administrator. His job is to satisfy the demands of creditors. He organizes the valuation and sale of the property of the enterprise, in order to pay off the received funds with all creditors. Of course, such liquidation with debts does not allow to fully satisfy the claims of creditors.

The fact is that all the property that can be sold, and the balances on the accounts are never enough to close all the obligations of the enterprise. Qualitatively the same situation takes place when the IP is liquidated with debts. There are many concrete examples. The entrepreneur takes a big credit and buys fashionable headdresses for this money. However, in a short time the fashion changes, and consumers stop buying these gowns. Everything, such goods can not be sold even at the purchase price.

Well, if the bankruptcy manager manages to get 10% of the cost for them. Means, and creditors will receive about the same share from the requirements. Thus, the bankruptcy of legal entities or individual entrepreneurs does not always allow creditors to return their financial assets. From this it follows that it is necessary to give out loans more accurately and taking into account the solvency of the borrower's company.