The bankruptcy procedure is a procedure that allows to pay the liabilities of the company through the sale of the assets (if there is). At the end, it leads to the dissolution of the company. The liquidation is necessary when a company in difficulties accumulate debts without perspective of recovery. For information, there is a procedure of liquidation simplified for small businesses.
Definition
The bankruptcy is a procedure ordered by:
- the commercial court in the case of a business enterprise (merchant, craftsman)
- the Court of first instance in other cases.
She ruled against a company that is clearly in a state of cessation of payments and the recovery is clearly impossible. The liquidation is then intended to settle the liabilities of the company. This procedure is applicable to a trader, a registered person to the directory of trades, a farmer or a legal person in private law. Unlike the recovering proceedings, a judicial liquidation puts an end to the existence of the company.
Companies in liquidation
A judicial liquidation shall apply to any person engaged in commercial or artisanal activity, to any farmer, to any individual professional self-employed as well as the companies and associations. It concerns the debtors who are in cessation of payments, which is unable to meet their liabilities with available assets; and whose recovery is clearly impossible, so a recovering proceedings would be useless.
Conditions for opening
The competent court is:
- the Court of trade if the debtor is shopping or registered to the directory of trades.
- the Court in other cases.
The application for opening a liquidation may be initiated by:
- an application of the debtor no later than within 45 days following the cessation of payments when no conciliation proceedings within this period (some small entrepreneurs can on this occasion sought a professional recovery procedure in order to obtain the cancellation of the debts of the company);
- an assignment of the debtor by one or more of its creditors;
- a seizure of the Court;
- a seizure of the Court at the request of the public prosecutor.
When it emanates from the debtor, the application must contain the elements provided by section R631-1 and R631-2 of the Commercial Code.
Procedure
Judgment
In its judgment, the court appoints a liquidator. The debtor is possession of administration and the disposition of his property. The rights and actions of the debtor on his heritage are then exercised by the liquidator. It is notably the redundancies planned in response to the decision opening or pronouncing the liquidation. The dismissal procedure is then subject to special rules of the fact of the situation of the company. When the debtor is a natural person and not a company, it cannot carry out any commercial, artisan, agricultural activity or independent professional for the duration of the liquidation. However, this rule is not applicable to the individual entrepreneur debtor when its new activities require a different heritage targeted by the procedure. The closing of the liquidation comes at a date fixed by the tribunal. If it cannot be pronounced at the end of this period, the Court may extend its duration by a reasoned decision.
Payment of debt
The liquidator is entitled to pay the creditors. It is his responsibility to allocate the proceeds of sales and to set the order of payment of creditors. Under the control of a receiver, the debtor’s property sales can be made by mutual agreement or through public auction in accordance with the provisions of the Commercial Code. Closure of the procedure of the closure of the proceedings comes to one of the following reasons:
- There are more than current liabilities;
- the liquidator has sufficient funds to pay creditors;
- the inadequacy of assets makes it impossible the continuation of the operation: we then proceed to the closing for lack of assets.
At the end of its liquidation, the company no longer exists as a person moral.
Sale of the business
When recovery offers have been made, the liquidation can also take the form of a transfer the whole or part of the company. This recovery must ensure maintenance of activities of operation autonomous, all or part of the jobs that are attached as well as the discharge of the liabilities. The assignment plan was arrested by the tribunal. The successful bid is one that allows in the best conditions to ensure more sustainable employment attached to all transferred as well as the payment of creditors while presenting the best guarantees of execution.
The assets of PHENIX EXPERTISE
Why rely on the services of PHENIX EXPERTISE? Our consulting firm is an expert of these collective procedures and will help you in implementing your liquidation:
I am an officer for more than 10 years. I myself have lived several collective procedures and I know the anguish they provide, so I want to offer my knowledge, my skills and my network in this area. I'll be by your side throughout the procedure of liquidation, to support you, you bring my advice and help you put in place solutions to defend at best your interests. Thanks to its perfect knowledge of the procedure, PHENIX EXPERTISE will guide you throughout the process and will help you avoid some errors that will result to delay the processing of your file. As a business owner, it is essential to proceed with the closing of your business in good and due form. Indeed, even if you have not received raises of creditors, it is not impossible that you receive charges after the fact, especially if you have created a new business. Because we know that the leaders with a firm in difficulty have low resources, PHENIX EXPERTISE offers its services at attractive rates, fixed and paid in several installments and adapts to the size of the company.[/ su_spoiler]
