Tiếng Việt
中文 (中国)
日本語
한국어Dissolution and bankruptcy both result in the termination of business activities of the enterprise. The business leads to dissolution or bankruptcy due to many reasons. In which, bankruptcy is posed if the enterprise or cooperative is insolvent within a period of time as prescribed by law. So how does the bankruptcy process of enterprises and cooperatives take place? Here, Bi Law Firm will present the above issue.
1. Concept
According to Clause 2, Article 4 of the Law on Bankruptcy 2014, Bankruptcy is a state in which an enterprise or cooperative is insolvent and is declared bankrupt by the people’s court.
According to current legal regulations, enterprises are insolvent when they fail to fulfill their debt payment obligations within 3 months from the due date of payment. At this time, the person who has the right and obligation to file a petition for initiation of bankruptcy proceedings may proceed to file a petition for initiation of bankruptcy proceedings at the court.
2. Overview of the enterprise bankruptcy process
Stage 1: Proceed to file a petition to open bankruptcy proceedings.
An applicant for bankruptcy proceedings may be: Creditor; Employees, trade union representatives; Enterprises and cooperatives are insolvent; Shareholders, groups of shareholders; Cooperative; Member cooperatives. The above subjects proceed to submit the application to the competent court.
Stage 2: The court will accept and file a petition to open bankruptcy proceedings.
After receiving the receipt of the payment of bankruptcy fees, the court shall accept the application and notify the relevant subjects of the acceptance of the application.
Stage 3: Conducting bankruptcy proceedings.
The judge assigned to handle the case may issue one of two decisions: Decide to open or not to initiate bankruptcy proceedings (except for cases where the enterprise requests to open bankruptcy procedures according to summary procedures).
Stage 4: Appointing asset managers, enterprises to manage and manage assets.
If the judge decides to open bankruptcy proceedings, the judge will appoint an asset administrator and an asset management enterprise to coordinate and assist the judge in settling the case. Coordinate and assist in the inventory of assets, determination of property obligations, measures to preserve assets.
Stage 5: Convening a meeting of creditors
The judge shall convene a meeting of creditors within 20 days from the date of completion of the asset inventory, except in the case of bankruptcy according to summary procedures. A meeting of creditors with many participants and reaching a certain number of participants will be considered a valid creditor’s meeting. The creditors’ conference shall issue a resolution of the creditors’ meeting, including: Proposing to suspend the settlement of the bankruptcy case; Proposing the application of remedial measures for business recovery activities; Proposal to declare bankruptcy.
Stage 6: Making a decision to declare bankruptcy
The court declares bankruptcy in the following cases:
- To reconvene the creditors’ meeting but still fail to meet the conditions specified in Article 79 of the Bankruptcy Law on participants.
- The meeting of creditors failed to pass the resolution of the meeting of creditors.
- The enterprise or cooperative fails to develop a plan to restore business operations within the prescribed time limit;
- The meeting of creditors does not approve the plan to restore business operations of the enterprise or cooperative;
- Enterprises and cooperatives fail to implement the plan to restore business operations.
Stage 7: Execution of the bankruptcy decision.
After 5 days from the date of issuing the decision declaring bankruptcy, the civil judgment enforcement agency shall carry out the enforcement of the court’s decision declaring bankruptcy. Enforcers shall coordinate with asset management officers and asset management and liquidation enterprises to perform tasks, including: Liquidating assets in accordance with law; Property valuation; Sale of property; Recovery of property in case of violations;
Bi Law Firm has presented an overview of the bankruptcy process in general according to the provisions of the Bankruptcy Law 2014. If you have any questions related to the above issue, please contact Bi Law Firm Limited for advice. more detail.
Please contact us:
