07.04.2020
Author: Joanna Bogdańska – Attorney at law
The project of “anti-virus shield” does not contain, in its current form, provisions affecting the principles of declaring insolvency by companies.
As a reminder, in accordance with the law, insolvency occurs when the company has lost the ability to perform its financial obligations. It is presumed that this occurs when:
- The company has lost the ability to perform its financial obligations if the delay in the fulfilment of these obligations exceeds three months;
- When its obligations exceed the value of its assets and this condition is covered for a period exceeding twenty four months.
The law provides, in addition to bankruptcy proceedings, aimed at terminating the company’s existence, also remedial procedures and provisions to conclude an arrangement with creditors. Restructuring proceedings can therefore be an ideal solution for entrepreneurs to survive the crisis and to return to normal business over time. Depending on the state of debt, it is also possible to carry out accelerated restructuring proceedings.
What are the benefits of initiating restructuring proceedings? Depending on the type of chosen restructuring form:
- Postponing debts, paying out in instalments, in some cases, redemption;
- Determining the rules for paying the debts taking into account the debtor’s abilities;
- Protection against ongoing enforcement;
- Reduction of employment.
Where to start?
First of all, make a reliable list of claims and the company’s assets. It is the starting point for determining the financial possibilities of the entrepreneur and shows the way out of the crisis situation.
