When a company faces such severe insolvency crisis that becomes economically unfeasible, It is crucial to make accurate decisions to mitigate the negative impact. Closing the decision to close the business can aggravate the situation, affecting not only the company and its creditors, but also to the entrepreneur and its employees. In contrast, Proceed with formal and orderly settlement allows the project to be completed in a structured way, respecting the rights of all those involved and facilitating the future recovery of the entrepreneur.
What is companies liquidation?
Companies settlement is a judicial procedure for the rapid and efficient sale of the goods of a company that has become economically unfeasible. The main objective is to pay the company's creditors, allowing an orderly resolution of debts and the formal closure of the business.
According to current legislation, The liquidation can be applied to both private persons of private law, whether with or without profit, as to natural persons who are first -class taxpayers or who are under the article 42 N.º 2 of the Law on Income Tax (Fees ballots).
Procedure and benefits
The liquidation is carried out within limited deadlines, usually around 12 months, and offers several key advantages:
- Debt resolution: Allows debtors to extinguish the unpaid balance of their debts, providing an orderly output of the financial crisis.
- Incentive to new ventures: It facilitates the creation of new businesses by releasing the entrepreneur from accumulated financial loads.
- Tax benefits: Offers certain tax benefits for creditors, helping to soften the impact of unpaid debts.
Legal Requirements and Procedure
Since settlement is a judicial process, requires the assistance of a specialized lawyer. The liquidator fees are covered with the seized assets of the company. In case these assets are insufficient, Additional costs can be assumed by the Superintendency Budget.
Conclusion
Opting for formal settlement not only ensures an orderly closure of the business, but also provides entrepreneurs for an opportunity to start again without the financial charges of a failed company.
In Vázquez and Manchón, Our team specialized in bankruptcy procedures is here to help you navigate the liquidation process with the objective of protecting your rights and facilitating a successful transition.
