Startup bankruptcy? Advice from a professional lawyer

Startup bankruptcy? This can be solved

“Have you ever heard the term corporate bankruptcy?”

Corporate bankruptcy is a legal procedure that can be initiated in situations where a company is unable to repay huge debts that it cannot afford.

If the company can no longer operate because its liabilities are greater than its assets, the company can be liquidated through bankruptcy procedures. Through this, debts that exceed assets can be resolved and the representative can be freed from legal liability.

You can have a fresh start, free from the constant urging and pressure of creditors to repay.

Read more about startup bankruptcies

Link: Startup bankruptcy, expert lawyer’s know-how for resolving it revealed

Two advantages of corporate bankruptcy

1. Debt Consolidation & Tax Burden Reduction

If the company does not proceed with bankruptcy proceedings, all debts held by the company must be repaid. However, through bankruptcy procedures, debts cannot be repaid in full, and debts can only be repaid with company assets under the management and supervision of the court. Likewise with taxes, taxes originally payable by a corporation can be treated as the amount converted from assets held by the corporation (there are some exceptions).

2. Worker protection & exemption from legal liability

If an employee’s salary begins to fall behind, the employee can receive three months’ worth of wages and three years’ worth of severance pay from the government by applying for replacement money after being declared bankrupt. Additionally, if wages are not paid for a certain period of time, the representative may be punished for violating the Labor Standards Act, but may be exempted from this responsibility through bankruptcy procedures.

Startup bankruptcy? 2 things to watch out for

Number 1 | When It’s Too Late to File Bankruptcy

“Should I go bankrupt… or not?…” The time spent worrying about this is itself a cautionary tale. A company that has run out of capital will no longer be able to continue operating. In this case, you need to find a solution quickly. If the debt problem is not resolved, reminders will begin, employee salaries and taxes will fall behind, and the likelihood of being embroiled in civil and criminal lawsuits increases. Rather than considering filing for bankruptcy on your own, we recommend that you receive one-on-one consultation with a corporate bankruptcy attorney with experience and expertise.

Number 2 | If you file for bankruptcy without reviewing the company’s financial statements

The court reviews the reasons for applying for bankruptcy based on strict standards to ensure that corporate bankruptcy is not misused. During this process, the company’s financial data, list of creditors, and financial transaction details are thoroughly reviewed. Based on these financial data, the following questions will be asked during the interrogation of the representative or executive:

Is the company really no longer able to continue operating?

Why did debt increase?

Whether the entire debt should be forgiven, etc.

In order to receive court approval, you must be able to present a persuasive answer based on financial statements.

Read more about startup bankruptcies

Link: Startup bankruptcy, expert lawyer’s know-how for resolving it revealed