It is not easy to realize that the business to which you have devoted so much effort will have to be closed, and that the only way out is to declare bankruptcy.
In these moments it is very important to realize that you are not the only entrepreneur going through problems, because the economic crises experienced by the country affect many people, including businesses that have worked for a long time.
In addition to the crisis, there are other reasons that can lead a business to face financial difficulties, especially during the first two years of operation and often because of the lack of planning and financial control and experience.
According to a survey conducted by IBGE, about one in five companies already closed abruptly during the first year.
WHAT IS BANKRUPTCY?
One of the most well-known synonyms for bankruptcy is the word "bankrupt", an expression that in the Italian language means "bankrupt bank", since the creditors had the custom of breaking, in public place, the bank in which the debtor normally sat, demonstrating, in this way, all their revolt with the situation.
And it was precisely in Italy that the institute of bankruptcy more evolved over the years, since the country was one of the first to develop mercantile activities.
It was created as a mechanism so that companies that are facing financial difficulties can pay the creditors in the fairest way possible, that is, preference is given to payments to those who need the most money.
When the company's debts are unsustainable and greater than the sum of its assets, and after several attempts to negotiate with creditors, bankruptcy must be sought.
HOW DO I KNOW WHEN IT'S TIME TO FILE BANKRUPTCY?
Are you having trouble knowing if you should file for bankruptcy or not?
Firstly, those who resort to this institute must be aware that it is the last resort to seek, since it is an extreme measure that will bring many problems for the entrepreneur and society.
To know the right time, you should consider whether there really is no other way out, if you have already tried to negotiate with all the lenders, and if the guidance of the professionals also leads to the idea of bankruptcy.
WHAT ARE THE DIFFERENCES BETWEEN RECOVERY, BANKRUPTCY AND BANKRUPTCY?
Formerly we had in the legislation the institute of concordat, that much think that only changed of name for recovery, but they have some differences.
Bankruptcy has already been extinguished and was far less comprehensive than the recovery, as only a few companies were subject to that, contrary to this, which greatly increased the chances that business can recover.
Both are institutes that were used to avoid bankruptcy, but while the concordat was decided by a judge, the judicial recovery is the result of a joint decision of the creditors and judicial administrator.
More than that, the recovery aims to make it possible to overcome crisis in companies that demonstrate that they have the conditions and that meet the requirements to join the application.
The recovery can be of two types, as described below:
Extrajudicial: this form of recovery is carried out without the inference of justice, that is, the parties involved should try to enter into an agreement, which must be approved by a judge. Usually this is the first solution sought by entrepreneurs to try to negotiate with creditors;
Judicial: in this case the court interferes in the realization of the agreement, and if changes are required in the recovery plan by the creditors and the debtor not accepted, can be declared bankrupt;
A good recovery plan is going to be good for both the lenders and the businessman because they will have an agreement whereby they will be able to receive the payments of the debts and they will have better deadlines and will not have to close their activities.
IT IS IMPORTANT TO HAVE GOOD LEGAL ADVICE AT THIS TIME
You should seek help from a lawyer before taking any hasty action, as only a professional with experience in the field can guide you in the best way during a possible bankruptcy process.
In addition, the lawyer is critical for you to have as much security as possible during a bankruptcy process, because with his experience in such situations, it can help lessen his anxiety.
Unfortunately, bankruptcy can drag on for a few years in court, and a good lawyer can also help speed things up and allow this difficult phase to happen more quickly.
WHO WILL FILE FOR BANKRUPTCY?
The opening of bankruptcy proceedings may be requested by both the debtor and the creditors.
The debtor can himself ask for bankruptcy of the company when he realizes that there is no longer any possibility of solving the debts and that the recovery will also not have efficiency.
The entrepreneur is required to apply for self-bankruptcy if he does not comply with the requirements for judicial recovery, which are as set out in Article 48 of Law 11101/2005: not be bankrupt, or, in any case, that the decision is final (finished); not have obtained judicial recovery in the last five years; among other cases;
If the creditor finds that the debtor no longer has the financial means to pay the debts and that he will not be able to recover his money in any other way, he may file for bankruptcy.
In order for the debtor's bankruptcy to be required, he must have debts that exceed 40 minimum wages.
It is important to remember that no lender should use the bankruptcy institute against an underpaid lender without there being real grounds to make use of this measure, which should be exceptional.
EFFECTS OF BANKRUPTCY DECREE
The first effect of declaring bankruptcy for a business is that it will be terminated, and all assets will be settled for the payment of debts.
In addition, all assets that are destined to the payment of debts and that are part of the company society will be controlled by a receiver.
Members will also no longer be allowed to withdraw any amount corresponding to their quotas.
The bankrupt businessman will be prevented from carrying on business activities while the process lasts and his obligations are not extinguished.
If he practices fraud or any other crime during any phase of the bankruptcy process, the businessman will be subject to arrest.
In specific situations may even occur the disregard of the legal personality, in which the businessman will respond with his personal assets to the debts of the company.
Faced with a bankruptcy, it is important that the businessman is surrounded by people who help to convey security, as it can be one of the key factors so that despair is not unsustainable.
We know that it's very difficult to see a deal that you've put so much effort into closing but try to keep your head in place and not commit impulsive acts that you may regret later.
The lack of organization of finances is one of the main reasons that can influence a premature bankruptcy of a company, and to close the malaria, we suggest some good practices for the entrepreneur.
Control daily the Accounts Payable and Receivable from your enterprise;
Have as partner a reliable accountant;
Always seek knowledge in the area of entrepreneurship and finance;
Always try to understand in depth the needs of your customers and market;
Think big but start small. Avoid taking bigger steps you can take;
Posted on May 11, 2018 at 02:09 PM