Gültigkeitsgebiet: Bundesweit
If you want to start a business in Germany, you must observe certain regulations and guidelines. Here you will find information on your rights and obligations, in particular regarding insolvency proceedings and the liquidation of companies.
Insolvency or over-indebtedness
One insolvency-law overindebtedness exists when the assets of the debtor no longer cover the existing liabilities. The cause for Insolvency or Excessive debt is often a missing or inadequate crisis management. It usually leads to payment difficulties turning into insolvency.
What to do in the event of existing or impending insolvency or over-indebtedness depends on the Legal form of the company and his specific situation:
Types of insolvency proceedings
Regular insolvency proceedings – business operationsThe insolvency proceedings for a business operation serve to satisfy the creditors collectively. In the process, the business operation does not necessarily have to be liquidated. Instead, the Insolvency Code also offers opportunities for its preservation.
regular insolvency proceedings – natural personThe standard insolvency proceedings serve to Debt relief natural persons, meaning humans, who
estate insolvency proceedingsThe subject matter of the estate insolvency proceedings is the assets of the estate, whereby the purpose of the proceedings—unless applied for by a creditor—is regularly to limit the liability of the heirs to the estate.
file for insolvency
The insolvency proceedings are upon request only opened. Certain companies are under an obligation to file for insolvency, for example GmbHs and a GmbH & Co. KG. The application must be submitted to the competent Bankruptcy Court to be made in writing or declared to the registry office. Those entitled to file applications are creditors and the debtor.
The application can be withdrawn be, as long as the insolvency proceedings have not yet been opened. If the application is withdrawn, the procedural costs are imposed on the applicant. The courts generally decide on the insolvency application within approx. 4 to 12 weeks.
In the event of insolvency or over-indebtedness, the Managing Director respectively, management boards or liquidators in accordance with Section 15a of the Insolvency Act (InsO) without undue delay, but at the latest 3 weeks to file for the opening of insolvency proceedings after the occurrence of illiquidity or over-indebtedness. The 3-week period is to be understood merely as a maximum period which must not necessarily be used up. If the filing for insolvency culpably delayed, omitted or the application is not submitted correctly, those obligated to apply may even face criminal prosecution. Furthermore, there is a risk of Liability with personal assets. Liability of the Managing Directors insolvency-related duties are governed by the Act Concerning Companies with Limited Liability (GmbHG).
The Involuntary petition by a creditor is only permissible if this person or entity meets certain requirements. The creditors must:
It should be noted that: The claim may
According to the file, the procedure is loud Section 54 of the Insolvency Statute (InsO) not subject to advance payment; the costs will be covered from the insolvency estate after the conclusion of the proceedings or billed to the party liable to pay the costs. In addition to the debtor, the petitioning creditor is always liable for the costs incurred up to the opening of the proceedings. The amount of the Administrator fees are in the Insolvency Remuneration Regulation Handled. The Expert's compensation is primarily determined by the time spent on his activity.
The possibility of Deferral of procedural costs according to Section 4a paragraph 1 sentence 1 of the Insolvency Statute only for natural persons who discharge of residual debt apply and whose assets are insufficient to cover the costs of insolvency proceedings.
Appoint an insolvency administrator
If insolvency proceedings are opened, the Bankruptcy Court one insolvency administrator. A natural person suitable for the respective individual case, in particular business-competent and independent of the creditors and the debtors, shall be appointed as insolvency administrator. This person is to be selected from the circle of all persons willing to take on insolvency administrations. The administrator shall receive a certificate of his or her appointment. Upon termination of the office, the Certificate to be returned to the insolvency court.
In the first creditors' meeting, following the appointment of the insolvency administrator, the creditors may elect another person to replace him or her.
The insolvency administrator is under the supervision of the insolvency court. The court may at any time demand individual information or a report on the status of the proceedings and the administration of the estate from him or her. The insolvency court may dismiss the insolvency administrator from office for good cause.
To appoint the insolvency administrator, please contact the competent Local Court as insolvency court.
grounds for insolvency
The opening of insolvency proceedings requires that a ground for opening exists. There are three grounds for opening:
Insolvency after Section 17 of the Insolvency Act (InsO)
The debtor is insolvent if they are unable to fulfill their due payment obligations. This is generally to be assumed if the debtor Payments suspended Determinative for the question of insolvency is the Due date of liabilities. Deferred liabilities are not due. However, a serious demand for payment is not necessary to assume maturity, so a reminder is not required.
Typical evidence are for insolvency:
Imminent insolvency following Section 18 of the German Insolvency Act (InsO)
Imminent inability to pay occurs when the debtor is expected to be unable to meet existing payment obligations at Due date to be fulfilled. Use should be made of the possibility of the debtor's own application due to impending insolvency particularly when rehabilitation opportunities exist for the struggling company, as these are higher the earlier an insolvency petition is filed.
Over-indebtedness after Section 19 InsO
In the case of legal entities – or if partnerships do not have a natural person as a personally liable partner behind them – over-indebtedness can also be a ground for opening insolvency proceedings. According to Section 19(2) of the Insolvency Act (InsO), over-indebtedness exists when the debtor's assets no longer cover the existing liabilities, unless the continuation of the business is predominantly probable under the circumstances.
In addition to the question of balance sheet overindebtedness – so if the assets shown on the asset side of the balance sheet are less than the liabilities shown on the liability side – the going-concern forecast relevant to the assessment of the insolvency reason of over-indebtedness. Mathematically over-indebted companies can avoid the obligation to file for insolvency provided they can establish a positive going-concern forecast and substantiate it.
Claims by employees, for example to salary, holiday pay, pension contributions
The opening of insolvency proceedings against the employer's assets does not affect Obligation to pay contributions to health, pension, long-term care and unemployment insurance. Special attention must be paid to the punctual payment of employee contributions. Here, there is a risk of criminal liability under Section 266a, Paragraph 1 of the German Criminal Code (StGB), if they are not transferred to the institutions on time. Obligations to provide information and the obligation to provide accurate and complete details also exist in connection with employer social security contributions, compare Section 266a subsections 2 and 3 of the German Criminal Code (StGB). Only the Accident insurance contributions may be waived, if employees were released from work after the opening of insolvency proceedings until the timely termination of their employment relationship.
To protect employees from loss of earnings, under certain conditions, the Federal Employment Agency paid insolvency benefit. The period covered by the insolvency benefit generally encompasses the last 3 months prior to the court order opening insolvency proceedings or dismissing the petition due to insufficient assets, the so-called insolvency event. The insolvency benefit is, pursuant to sections 165 et seq. of the Social Security Code (SGB) III, generally amounting to the net earned income rendered. Within a preclusion period of 2 months after the insolvency event, employees can apply for insolvency benefits at the competent employment agency, see in this regard Section 324 paragraph 3 sentence 1 of the Third Book of the Social Code (SGB III).
protective shield procedure
The protective shield procedure Can a debtor, under certain circumstances in the run-up to insolvency proceedings, simultaneously apply for protective shield proceedings alongside the insolvency application? Section 270b of the Insolvency Statute is a Special case of self-administration before the opening of insolvency proceedings. It is intended to make it easier for the debtor to restructure the company through early action. This is a procedure for preparing a Renovation through an insolvency plan in combination with self-administration. Self-administration means the continuation of the business by the debtor under the supervision of an insolvency monitor.
Prerequisite for the protective shield proceedings is that with the application a reasoned Certificate is submitted by a tax advisory, auditing, or law firm experienced in insolvency matters, or a person with comparable qualifications. This certificate must state that
During the protective shield proceedings, the court may not appoint a preliminary insolvency administrator and also may not deprive the debtor of the power to dispose of their assets. The debtor is granted a period of a maximum of 3 months to Drafting of an insolvency plan set. After the expiry of the period or after the court lifts the order for the protective shield proceedings, the insolvency court decides on the opening of insolvency proceedings. During the protective shield phase, it is typically crucial whether the debtor succeeds in gaining the trust of contractual partners and creditors in the possibility of restructuring or not.
Renovation methods
Besides liquidation, restructuring options can also be considered in insolvency proceedings. A prerequisite is a restructurability. As rehabilitation methods, the business rescue via asset transfer and this insolvency plan procedure possible. Preparations for this should be initiated as early as possible. In particular, this can be done by protective shield procedure before Initiation of insolvency proceedings offer.
Under transfer-based restructuring refers to the acquisition of a company or part of a company by a new person or corporation. The new company is unburdened of liabilities from the insolvent company's past, where applicable with the exception of employment relationships, Section 613a of the Civil Code (BGB). By means of an insolvency plan procedure, the previous legal entity itself can be restructured. A plan is drawn up in accordance with certain regulations, according to which the continuation and satisfaction of the creditors are to take place, see in this regard Sections 217 et seq. of the Insolvency Act (InsO).
discharge of residual debt
Debtors who have been discharge of residual debt will not be denied, can after 3 years become debt-free. This is made possible by the Act on the Reduction of the Rest Debt Discharge Procedure, which applies retroactively to all applications filed as of October 1, 2020.
The discharge from debts is available to everyone natural persons open. Therefore, self-employed persons, freelancers, and private individuals can apply. In the event of the insolvency of a GmbH (limited liability company), however, a discharge of residual debt is not possible because the GmbH is a legal entity.
The debtor who files an application for discharge of residual debt has already, since the opening of the insolvency proceedings, made an effort to Gainful employment to strive. For the next 3 years, the amount generated from this attachable earned income or to assign equivalent benefits to a trustee. Enforcement and execution measures by individual creditors are, during this so-called good behavior period Inadmissible. If the debtor does not pursue gainful employment or does not make sufficient efforts to do so, or if they are convicted of bankruptcy offenses, the discharge of residual debt can be denied. An example of a bankruptcy offense is the delayed filing for insolvency.
Start-up portal of the Federal Ministry for Economic Affairs and Climate Action (BMWK):
This support service assists you in exercising your rights and fulfilling your obligations within the European Single Market.
