Running your own business is not always just a series of successes. It also happens that a brutal market makes it necessary to stop running your own business. Indebtedness, too much competition or simply a missed idea can be a source of not only business failure, but above all the cause of financial problems. In such a situation, bankruptcy is a salvage. How to do it? Where and when to submit an application?
Contrary to popular opinion, any entrepreneur may file for bankruptcy. This right applies to both large companies, a small, residential shop or shoemaker’s premises. The only condition is the entrepreneur’s status, but the type of business is not much. This principle results directly from the provisions of the bankruptcy and reorganization law.
According to art. 5 of the Bankruptcy and Rehabilitation Act, the provisions of this legal act apply to all debtors who have the status of an entrepreneur. Thus, according to the definition, an entrepreneur is a natural person, a legal person and an organizational unit without legal personality, the separate law of which grants legal capacity, conducting business or professional activity on its own behalf. Therefore, any entity can perform regardless of the type of business it conducts and what organizational form it has. Regardless of it is a commercial law company or joint-stock company or natural persons, everyone can apply for bankruptcy.
Such a wide catalog of entities authorized to declare bankruptcy is the effect of adopting the definition of an entrepreneur directly from the Civil Code, ie: natural persons, legal entities, organizational units without legal personality, which conduct business on their own behalf and operate under the company. What is more, the Bankruptcy Act itself does not define what should be understood as economic activity. Therefore, it was assumed that such activity is considered as production, commercial or service activity carried out for profit or performed as part of his profession.
Application for bankruptcy
A declaration of bankruptcy means that the debtor is unable to meet his financial obligations. As a result, after the announcement of this state, the creditors are losing the possibility of further effective pursuing claims from the given debtor. An application for bankruptcy may be filed by the debtor himself or by the creditor. Article 21 of the Bankruptcy and Reorganization Law clearly indicates that the debtor’s application for bankruptcy should be submitted to the court within no longer than two weeks from the moment the prerequisite appeared in the declaration of bankruptcy.
To comply with formal requirements, a petition for bankruptcy of a sole proprietorship must include:
- first name and last name,
- the name of the company under which the activity is carried out,
- place of residence,
- place of business – address where the company is located,
- entry in the business activity register (CEIDG) – in the case of an entrepreneur who is a natural person,
- information whether the debtor is subject to the provisions of Polish law or the law of another Member State,
- circumstances that constitute the reason for filing the application with probability.
In the case when the debtor is filing himself for the bankruptcy
The application should contain additional information. This applies above all to information related to the form of bankruptcy. There is a possibility of declaring bankruptcy with the option of concluding an arrangement or covering the liquidation of assets.
Therefore, the application should contain:
1. an up-to-date list of inventory with an estimate of the valuation of ingredients,
2. the company’s balance sheet prepared on the day no later than thirty days before the day of submitting the application,
3. a list of all creditors together with information on the date of payment, the amount of debt, etc .;
4. a declaration on settled debts made within six months before the date of submitting the application,
5. a list of debtors obliged to the applicant together with the addresses, specifying the claims, the date of their creation and dates of payment,
6. a list of enforcement titles and enforcement titles issued to the debtor,
7. information on proceedings regarding the establishment of mortgages, pledges, registered pledges and treasury pledges and other encumbrances subject to entry in the land and mortgage register or in registers, as well as on other court or administrative proceedings regarding the debtor’s assets.