The formation and development of a market economyaccompanied by various, sometimes contradictory, processes that take place within the framework of current legislation. As practice shows, the bankruptcy of legal entities occurs for various reasons. In general, this procedure is regulated by a special Law “On Insolvency (Bankruptcy)”. In its original form, this Law was intended to ensure a more rapid flow of capital into areas of activity that are developing more dynamically.
To do this, you need to remove the enterprise from the market,who 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 relevant goods and services to the market. 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 for launching it.
However, whena certain period, the company can not fulfill its obligations, to demand its liquidation can be someone from the stakeholders. Such a person can be a state. This becomes possible when taxes and obligatory payments to state funds are not made for three months or more. For example, a pension fund may initiate this process. Bankruptcy of legal entities is possible only by the decision of the arbitration court. It is to this court that the appropriate application should be sent.
It often happens that the company is not able topay off with suppliers of raw materials and components. In this case, the mechanism for initiating an insolvency or bankruptcy case is similar. The interested party applies to the arbitration court, which can make the appropriate decision. And this decision may not be at all what the plaintiff would like to receive. After the court has considered the application, a monitoring procedure is introduced at the enterprise. The court oversees the situation in the enterprise.
Practice shows that very often enterprisesin this state it has debts that can still be settled. But if the situation does not improve with external observation, then by a decision of the same court, a receiver is appointed. His responsibilities include satisfying creditors ’claims. He organizes the valuation and sale of the company's property in order to settle accounts with all the creditors from the funds received. Of course, such a liquidation with debts does not allow to fully satisfy the claims of creditors.
The fact is that all property that canto sell, and the balances in the accounts are never enough to cover all the obligations of the enterprise. Qualitatively, the same situation occurs when liquidation of individual entrepreneurs with debts is made. There are many specific examples. The entrepreneur takes a big loan and buys fashionable hats with this money. However, in a short time, the fashion changes, and consumers no longer buy these clothes. Everything, such a product is no longer possible to sell even at the purchase price.
Well, if the administrator will succeedbail out for them 10% of the cost. This means that lenders will receive approximately the same share of their claims. Thus, the bankruptcy of legal entities or individual entrepreneurs does not always allow creditors to return their funds. From this it follows that lending should be made more accurately and taking into account the viability of the borrower's company.
