Every year we learn a huge amount of information about bankruptcy from various media. Few understand the essence of this matter, but in general terms we imagine what it is. One of the main provisions of this procedure is that this process applies exclusively to persons who are engaged in entrepreneurship.
Ruin is always an unpleasant situation. But it is worthwhile to understand that if you familiarize yourself with the regulatory legal acts in detail, then you can even find a way out of this situation. This article will focus on the bankruptcy of an individual entrepreneur. The most frequently asked questions on this topic are: "How to avoid ruin, how to file for insolvency and how will this help a person?" Next, we will try to find the answers to them.
Who are PIs?
Modern legislation provides for two forms of economic activity:
- entity;
- individual entrepreneur.
If we talk about the first form, we all know perfectly well that in this case we are talking about organizations, companies, that is, various associations that were created to achieve entrepreneurial goals.
If we define the IP, then it is worth saying that this is the subject of economic activity, which is characterized by the absence of the creation of an association. That is, in this situation we are talking about individuals who, in the manner prescribed by law, are registered to conduct economic activity on their own.
What is bankruptcy?
We all heard about this concept, but today we suggest that you familiarize yourself with the legal interpretation of this term. So, a clear indication of what such a phenomenon is, is provided for in the Law of the Russian Federation "On insolvency (bankruptcy)." After analyzing the norms of this act, we can conclude that bankruptcy is the inability of a person to answer for their monetary obligations.
The IP Bankruptcy Law provides for two aspects of the insolvency relationship. They are:
- debtor;
- creditor.
The first of these is a business entity that is not able to pay its obligations. Bankruptcy of an IP provides for recognition of it as a debtor.
The second side is all persons to whom the individual entrepreneur remains in debt due to the poor financial situation.
Reasons for insolvency of entrepreneurs
The Bankruptcy Law of the IP does not contain clear instructions, as a result of which it is commercial activity that is ruined. But if you look at the practice in such matters, you can identify several reasons. These include:
- general crisis trends;
- counterparty dishonest work;
- economic instability;
- unseen circumstances.
Quite often, it is with this that bankruptcy of individuals is associated. Individual entrepreneurs are not immune from external factors, which sometimes have destructive effects on business activities.
Legislative consolidation
It is worth considering that the norms where bankruptcy of an individual entrepreneur is indicated, the procedure, procedure, consequences, are crucial in practical activities.
First of all, the most extensive act, which is completely devoted to the issue of ruin of an entrepreneur, is the Law on Insolvency (Bankruptcy).It contains a huge amount of information that fully regulates all issues related to the system for recognizing IP as an insolvent entity.
In addition, more general information is contained in a variety of codes. Although they describe the essence of the procedure itself, nevertheless, if a person is faced with such a problem, it is necessary to familiarize yourself with the above-mentioned Law.
Bankruptcy Procedure IP
Like any other procedure provided by the state, recognition of a person as insolvent has a certain arrangement of actions and consequences. IP bankruptcy triggers three main procedures. These include:
- observation;
- global agreement of the parties;
- bankruptcy proceedings.
The first step is to analyze the financial condition of the individual entrepreneur. Such actions are directed to the description of all property and monetary assets that the IP has. In addition, after all funds have been fixed, their protection and prohibition of alienation are introduced.
The second stage involves a compromise between the parties. In this situation, repayment of loan obligations is carried out at the expense of assets held by the individual entrepreneur. If there are enough of them to satisfy all the requests, the case will be automatically closed.
Bankruptcy proceedings are held when the previous stage was not able to fully repay all debts. Therefore, the post of manager of bankruptcy proceedings is being introduced. Such a person deals with the assets of the entrepreneur and their sale in order to satisfy all creditors. It is at this stage that the bankruptcy of IP is recognized.
Signs that indicate the insolvency of the entrepreneur
This provision is enshrined in the Law, which we spoke about earlier. To date, the reasons for the insolvency of an entrepreneur are:
- the amount of claims made by all creditors should be more than 10,000 rubles for a period of 3 months;
- IP does not pay established taxes for more than three months;
- the value of all entrepreneur’s assets is less than the amount owed to creditors.
Three of the above items are the basis for opening a case for declaring an entrepreneur bankrupt. It is important to note that it is precisely all these provisions that must be observed simultaneously. The absence of at least one of them will not be able to provide a legal basis for granting a person insolvency status.
Consequences of recognition of IP as insolvent business entity
Bankruptcy of an individual entrepreneur is recognized solely in court. Only the arbitral tribunal has the right to make such decisions. After such a body issues a resolution on assigning an insolvent status to an entrepreneur, the following actions are carried out:
- accrual of penalties to the individual entrepreneur as a person who conducts economic activity ceases;
- all penalties that are of an executive nature are canceled, but this list does not include alimony payments and compensation for harm to health and life;
- all licensing documents become invalid;
- an individual ceases to function as an individual entrepreneur;
- for one year, a citizen is prohibited from registering his activities as individual entrepreneurship;
- all obligations to creditors are fulfilled.
If the first paragraphs are more or less clear, I would like to clarify some points on the last consequence. It should be understood that the satisfaction of creditors' requests is carried out exclusively from funds that came after the sale of IP property and financial assets that a person has. The fact remains that often such money is not enough. Therefore, all payments are made according to the size of the obligation. The more an entrepreneur owes a lender, the greater is his portion of the total financial possibilities of a bankrupt. And vice versa.
Debt closing business
Quite often it happens that a businessman loses his solvency, while having a bank loan. Bankruptcy IP with debts of this kind has its own characteristics.
First of all, it should be noted that rarely which banks issue money to a person as an individual entrepreneur. In most cases, such contracts are concluded directly with the citizen, and not the subject of commercial activity. Therefore, even if the bankruptcy of an individual entrepreneur is recognized in court, the individual will remain with the loans.
This is easily explained by the fact that a citizen’s personal debts do not relate to his business obligations. If, as a result of recognition of an individual entrepreneur as bankrupt, all debts are paid off, this does not in any way affect his personal loans.
The ruin of IP without property
Quite a few entrepreneurs are faced with the need to open a case to recognize their bankruptcy if they do not have property. In this situation, experts recommend doing this:
- calculate all debts;
- calculate how much the procedure for recognizing IP insolvent will cost.
Based on these calculations, we can draw conclusions: if the amount of debt exceeds the amount necessary for the trial, you can contact the authority of Themis. If on the contrary, then you should not waste time.
Bankruptcy Cost
Bankruptcy of an individual entrepreneur (order, procedure, consequences described in the article) requires the implementation of certain actions that are subject to certain taxes. It should be understood that before a person is declared unable to answer for his debts, you will need to pay:
- state fee for the actions of the arbitral tribunal - 20,000 rubles;
- filing a message to a special mass media about the announcement of the beginning of bankruptcy proceedings - 8,000 rubles;
- procedures for monitoring and production, which has the character of a tender - 390,000 rubles.
Bankruptcy IP is a rather expensive and lengthy procedure. Therefore, before resorting to such measures, you need to know for sure that the amount of total debt is greater than the above amounts.
In addition, once again weigh the pros and cons and choose a procedure for declaring the company insolvent that will meet your interests.
