Liquidation in Bankruptcy

Bankruptcy is the inability of an enterprise to continue operations due to financial difficulties that prevent it from meeting its debt obligations. An organization is declared bankrupt by a court decision based on current legislation. For this, the owner of the company or a creditor must file the appropriate application, the competent drafting of which our experienced lawyers are ready to assist with.

Reasons for liquidation of an enterprise and types of bankruptcy

The deterioration of an organization’s financial condition is mainly related to inefficiencies in the management system, in particular strategic errors in organizing production, as well as poor consideration of market conditions and potential risks.

An enterprise may be liquidated through the bankruptcy procedure in cases when the company’s assets are insufficient to:

• fulfilling its obligations to creditors;
• meeting the claims of counterparties;
• paying off wage arrears to the company’s employees;
• timely payment of taxes in full.

After initiating bankruptcy proceedings, a comprehensive rehabilitation mechanism may be engaged to restore the company’s solvency. If rehabilitation is objectively impossible, the liquidation procedure of the business entity comes into effect. Closing an individual entrepreneur (FOP) or an LLC through bankruptcy allows getting rid of a business that is no longer viable today, with minimal losses for the owner.

Legal and illegal types of bankruptcy

There are several types of financial insolvency of enterprises:

• Actual bankruptcy, caused by the organization’s inability to carry out its activities as a result of an excessive level of capital losses.
• Conditional bankruptcy, where the excess of expenses is temporary. In this case, effective anti-crisis management can restore the enterprise’s financial condition, which does not lead to its liquidation.
• Deliberate (intentional) bankruptcy, which is an illegal action, consists of the intentional embezzlement of funds by the owner or management.

Our law firm uses only the methods of terminating the activity of a business entity through bankruptcy provided for by the law of Ukraine.

Procedure and timelines for liquidation of a bankrupt enterprise

A legal entity or individual entrepreneur (FOP) may be declared insolvent if the amount of debt exceeds 300 minimum wages. Bankruptcy of a company with debts is a rather lengthy process, including the following stages:

• observation (monitoring) of the enterprise, allowing an objective assessment of its financial stability;
• attempt to restore the company’s solvency when the situation does not appear critical;
• appointment of an external manager who will manage the organization for a set period;
• declaring the enterprise bankrupt, after which the court makes a decision regarding the distribution of debts;
• termination of the business entity’s activities.

Our specialists are ready to provide legal support for this procedure at all stages. After receiving the court decision, it will take us at least 3 days for the liquidation record of your organization to be entered into the Unified State Register.

Service cost

The cost of the services provided is determined depending on the complexity of the situation. The final price may be influenced, among other things, by the amount of creditor debt. On average, liquidation of a legal entity or individual entrepreneur (FOP) declared bankrupt costs around 7000 UAH.

At the same time, the law firm Nakaz is ready to represent your interests in court, as well as undertake the responsibility of submitting documents to the relevant authorities.