Bankruptcy — Procedure, conditions and consequences
Bankruptcy is a court procedure initiated when a business cannot meet its obligations. The goal is orderly settlement of creditors and closure (or reorganization) of the business.
Definition
Bankruptcy is a court procedure initiated when a business cannot meet its obligations. The goal is orderly settlement of creditors and closure (or reorganization) of the business.
Details
Conditions: insolvency for more than 45 days or over-indebtedness. Director must file a petition. Process: petition to court → appointment of bankruptcy trustee → asset inventory → sale → creditor settlement (priority: employees → taxes → suppliers → owners). For DOOEL: owner is NOT personally liable (limited liability).
Example
DOOEL with 3M MKD liabilities and 1M MKD assets cannot pay for over 45 days → director files bankruptcy petition → trustee sells assets → employee salaries are paid first.