Bankruptcy is a fairly common procedure today, which is known to almost everyone. However, not many people know what happens next, after the founder of the LLC is declared bankrupt.
What does the law say?
Bankruptcy proceedings are regulated by the Civil Code of the Russian Federation. It states that the founders are not liable for the obligations of the LLC, however, the company itself is not liable for the obligations of its founders.
The situation when the company itself is not declared bankrupt, but only the founder (individual), deserves special attention.
If the founder of the LLC is bankrupt and he is the owner of the business, then this means that this organization does not have property and any monetary assets so that it is possible to pay off creditors.
Often there are situations when the company has neither industrial equipment, nor furniture, nor office equipment, nor funds in the accounts - nothing at all that can be sold in favor of debt. In this case, the debtor is trying to sell shares, get rid of property, resorting to various frauds. In this case, if he cannot be convicted of an offense, such a person shall be declared bankrupt. After that, the organization is evaluated by the arbitration manager or an expert involved and put up for sale by electronic bidding to pay off the debts of the founder of the bankrupt LLC.
Bankruptcy Procedure
As with any citizen, an LLC participant may accumulate accounts payable, which he is not able to pay off. The composition of such debt is not fundamental at the same time - it can be overdue loans for business or personal needs, arrears of taxes, fines, alimony, etc.
The debtor, the authorized body (for example, the tax office), and its creditors can apply to the arbitration court with a written application for recognition of bankruptcy. To accept the application, it is necessary that the amount of debt be more than 500 thousand rubles, and the delay in its payment should be more than 3 months. At the same time, taking into account the requirements of the law, the debtor himself must appeal to the arbitration court within 30 days if the satisfaction of all such claims from the creditors makes it impossible to pay the debt.
After accepting the application and other documents attached to it and confirming the applicant's arguments, a determination is made on the validity of this application. The approval of a positive decision is considered the beginning of the procedure for the founder of the LLC to be declared bankrupt. And then a number of different procedures follow, which will be discussed below.
Debt Restructuring
After accepting the statement of the debtor or its creditors, the latter is given 2 months to formulate a list of requirements for the debtor - all debts of the founder of the LLC shall be included here. At the end of the formation of this registry, a citizen, authorized body or creditors prepare a debt restructuring plan within 10 days, which indicates the procedure for paying off debts, as well as the duration of this event.
If the debtor and other interested parties did not submit a debt restructuring plan, the financial manager, taking into account the requirements of the law, proposes to the meeting of creditors that the debtor is declared bankrupt and the sale of the property that belongs to him begins.
So, the founder of the LLC is declared bankrupt. What restrictions will be imposed on him?
Limitations for the debtor-founder of the LLC
In the process of debt restructuring, that is, from the moment of accepting the bankruptcy petition and declaring it justified, until the full repayment of the debt or the beginning of the sale of property, the founder of the LLC imposes the following restrictions:
- The founder has the right to make one or several interconnected transactions for a cash amount of more than 50 thousand rubles. with securities or in relation to its own share in the LLC after the permission of the financial manager. The list of such transactions includes: the acquisition of shares in the LLC; alienation or other transactions that may lead to further loss of shares in the LLC, transfer of shares as collateral.
- Obtaining and issuing loans, issuing guarantees or sureties for third-party debts, transferring debts and other similar transactions, which does not depend on the size of their amount, are made only after obtaining the written consent of the manager.
- Bankrupt is forbidden to acquire shares in the authorized capital of enterprises or to make contributions to the authorized capital.
It should be remembered that the provisions of the Federal Law No. 127 governing the consequences of bankruptcy do not restrict the right to participate in the management of the LLC in the process of restructuring the debt of the founder.
What to do with LLC if the founder is bankrupt?
The consequences of the bankruptcy of the founder of the LLC
From the day bankruptcy of the founder of the LLC is recognized (the arbitral tribunal makes the appropriate determination), all of its property, including its share in the LLC, is entered into the bankruptcy estate. This means that there are consequences that are listed in the above federal law, in particular:
- Any transactions involving the debtor's property that are completed without the permission of the finance manager are considered void.
- The rights to dispose of the property of the bankrupt founder of the LLC pass to the order of the financial manager. Accordingly, the powers of participation in the management of the LLC (for example, voting at meetings, etc.) and the protection of corporate and property rights in court must also go to him.
Proposals to the court
If the sole founder of the LLC is bankrupt, from the end of the process of listing the property, the financial manager, according to information from the Federal Law No. 127, must submit proposals to the arbitration court within 30 days regarding the order, price and timing of the sale of the property of the founder. According to the same legislative act, if the arbitration or the creditors do not come to a different opinion, the share of the participant in the LLC should be sold at the auction. Lenders also have the opportunity to take ownership of the LLC share (if the charter of this organization allows this option) to pay off debts.
What happens to the LLC during the bankruptcy of the founder, it is important to find out in advance.
What to do if the property is not sold?
Sometimes it happens that the property of the founder of the LLC or its share cannot be sold and none of the creditors wants to accept them as a write-off of the debt. In such a situation, the financial manager, by virtue of the provisions of Federal Law No. 127, must transfer them to the debtor founder, whose right to fully dispose of his property or shares in the LLC is subject to restoration in this case. Thus, the property of the founder-bankrupt is entered into the bankruptcy estate for further sale on account of repayment of all existing debts. If no one wants to acquire it, ownership rights are returned to him in full.
We examined what the liability of the founder of an LLC in bankruptcy consists of.