Obligation to file for insolvency How companies ensure that they are fully financed for twelve months
Providers on the topic
The following situation: Although the managing director does everything to remedy the company’s financial misery, it slides into insolvency due to excessive indebtedness. This can be avoided by constantly checking whether a company is ripe for insolvency.
If a company is in financial difficulty, management should immediately check whether it is over-indebted. A company should definitely be fully financed for the next twelve months.
(Bild: Snowing – Freepik)
As of January 1, 2024, the obligation to file for insolvency has been fully in force again. This means that a company must now be able to prove that it is fully financed for the next twelve months in order to avoid having to file for insolvency due to excessive indebtedness. Attorney Alexander Eggen from Schultze & Braun explains what companies should pay attention to when it comes to this requirement and how they can avoid liability risks and criminal consequences due to (unintentional) delay in filing for insolvency.
What does it mean to be fully financed for twelve months?
The requirement to be fully financed for twelve months applies to capital companies – such as a GmbH, UG or AG – as well as the insolvency reason of over-indebtedness (not insolvency!). “A company is over-indebted if its liabilities are higher than its assets – unless the continuation of the company in the next twelve months is predominantly likely under the circumstances,” explains Eggen.
