- Bankruptcy

Bankruptcy filing requirements for companies

The bankruptcy filing in private bankruptcy

The bankruptcy filing requirement is relevant above all for companies, less for private individuals.

The good news in advance: For private individuals, insolvency or over-indebtedness is not a direct application for insolvency. A failure to do so is therefore not punishable.

However, in some cases, it is not advisable to wait too long to file for bankruptcy. For debtors could thereby risk their debt relief. This can be refused, inter alia, if

  • despite (imminent) insolvency or over-indebtedness and no prospect of an improvement in the economic situation, the opening of insolvency proceedings was delayed, whereby the satisfaction of the insolvency creditors in the last year before the bankruptcy was deliberately or grossly negligent.

Therefore, even private individuals should not miss the right time of the bankruptcy opening. The same applies to individual companies. Although there is no obligation to file for insolvency with individual companies either, there may also be disadvantages here.

It’s best to consult with Bankruptcy Attorneys’ Area of Practice!

The insolvency filing requirement for companies

For legal entities, ie mainly companies, however, applies a bankruptcy petition obligation in case of imminent insolvency and/or over-indebtedness. § 15a of the Insolvency Code (InsO) states:

(1) If a legal entity becomes insolvent or over-indebted, the members of the representative body or the liquidators must submit an opening request without culpable hesitation, but no later than three weeks after insolvency or over-indebtedness.

If there is an obligation to file for bankruptcy, GmbH CEOs etc. usually have three weeks to spare.

For example, the insolvency application obligation applies to a limited liability company, but also to an association. However, the bankruptcy filing obligation for the association can be found in § 42 (2) sentence 1 of the Civil Code (BGB).

What does the obligation to file for insolvency mean for companies?

Is a company or similar? is no longer able to meet its due payment obligations, or is likely to occur in the near future, it is insolvent or threatened with insolvency and obliged to file for bankruptcy.

The same applies if the company is over-indebted. If the liabilities cannot be covered by the existing assets, the insolvency filing obligation of the GmbH etc. arises because of over-indebtedness.

As a rule, the petition for insolvency must be filed within three weeks without culpable delay. Otherwise, those responsible may be liable to prosecution for insolvency.

Who has to file for bankruptcy?

Normally, for example, the insolvency application obligation of a limited liability company does not apply directly to shareholders, but to the respective managing director. However, in the case of so-called management-less companies without directors, it is also possible that shareholders are required to file for insolvency.

As a rule, the following persons, in particular, are affected by the bankruptcy filing requirement:

It is also punishable who ignores the insolvency filing obligation at corporate companies (UG).

  • Organs of legal persons
  • Managing Director and Liquidators of a GmbH
  • Board members and liquidators of an AG and KGaA
  • Board members and liquidators of a registered cooperative
  • Board members of a legally qualified association
  • Partnerships without natural persons as personally liable partners

Above all, corporations are therefore affected by the obligation to file for insolvency. The partnership (eg OHG or GbR), however, is usually run by shareholders who are personally and unrestrictedly liable. Creditors, therefore, have more options, such as foreclosure measures, to obtain their rights than is the case with the corporation. Therefore, there is usually no requirement for insolvency filing with limited partnerships (KG).

Note: Even without the obligation to file for insolvency, partnerships should be advised by a lawyer. The same rules apply as for private individuals – in case of doubt, the shareholder can be denied, for example, the waiver of residual debt.