Signs of bankruptcy of the enterprise

Bankruptcy of an enterprise is a financial condition recognized by a court in which a legal entity cannot fulfill its monetary obligations to creditors, suppliers and employees due to a lack of funds or liquid assets. According to the legislation, bankruptcy occurs when the debtor cannot restore solvency and satisfy the demands of creditors otherwise than through the application of the liquidation procedure.

A bankruptcy court decision triggers a series of legal procedures to pay off debts, including restructuring, rehabilitation or liquidation of an insolvent enterprise. Timely detection of signs of bankruptcy is crucial for protecting the interests of both the company itself and its counterparties. After all, it allows you to take the necessary measures for financial recovery or orderly settlement of debt obligations at an early stage.

Signs of bankruptcy of legal entities

• Suspension of payments

This is a situation when the company completely or partially stops making payments stipulated by contracts or legislation to suppliers, creditors, and employees due to the lack of funds in the accounts. Such a sign may arise due to unfavorable external factors or internal financial problems of the enterprise.

• Stop production

If the enterprise stops or significantly reduces the production of products or the provision of services, it is often caused by a lack of working capital for the purchase of raw materials, materials, payment of energy resources, payment of wages, etc. Idleness of the production cycle makes it impossible to obtain revenue and leads to an increase in losses, which disrupts the continuity of economic activity.

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• Reduction in sales volume

If a company records a steady decline in sales of its products or services over a period of time, this may indicate sales problems, loss of markets or uncompetitiveness of the offer. Accordingly, this reduces revenue and negatively affects the solvency of the business entity.

• Inability to pay debts

A key sign of bankruptcy is the inability of the enterprise to pay off credits, loans, promissory notes or other debt obligations to counterparties, creditors, and suppliers in a timely manner and in full.

• Changes in the company's balance sheets

Deterioration of financial reporting indicators, such as a decrease in net assets, an increase in uncovered losses, an increase in payables, may indicate the increasing insolvency of the enterprise. A systematic analysis of the dynamics of balance sheet items allows you to identify threatening trends and react in time.

Attracting legal assistance

The appearance of one or more signs of bankruptcy at the enterprise requires immediate measures from the management to restore solvency or initiate official bankruptcy procedures in accordance with the law. In such a situation, it is extremely important to seek qualified legal assistance from the company "Prykhodko and Partners".

The company's experienced lawyers will provide advice on all aspects of bankruptcy: from the analysis of the company's financial condition and identification of threats of insolvency to the support of rehabilitation or liquidation procedures in court. "Prykhodko and Partners" specialists will protect the interests of your business and help to settle existing debts in the legal field as efficiently as possible.