If the GmbH gets into economic difficulties and threatens insolvency, the management has extensive obligations. The managing director is required under civil and criminal law to file for insolvency if there is a reason for insolvency.
When is a GmbH insolvent?
Unter einer Insolvenz ist eine Situation zu verstehen, in welcher eine Gesellschaft nicht mehr in der Lage ist, ihre Zahlungsverpflichtungen nachzukommen. Es muss ein Insolvenzgrund vorliegen, damit eine wirtschaftliche kritische Lage zur Insolvenz führt. In der Insolvenzordnung sind drei Insolvenzgründe genannt.
Insolvency is a situation in which a company is no longer able to meet its payment obligations. There must be a reason for insolvency so that a critical economic situation leads to insolvency. There are three reasons for insolvency in the insolvency code.
2. Imminent insolvency
Another reason for insolvency is the threat of insolvency. Insolvency is imminent if the available means of payment and the credit line are not likely to be sufficient to meet the existing liabilities within a reasonable period.
Overindebtedness is only legally provided for legal entities (corporations) or partnerships. In the case of partnerships, this only applies if the partners are also legal entities and not private individuals. Overindebtedness exists if the debtor’s assets no longer cover the existing liabilities. A balance sheet is drawn up to determine whether there is overindebtedness. There is no overindebtedness if the continuation of the company is largely probable according to the circumstances.
When must insolvency be filed?
Whenever there is a reason for insolvency, insolvency must be registered. The insolvency must be reported immediately. This means that the insolvency application must be filed with the court within a maximum of three weeks after a reason for insolvency has been identified. If the deadline is not met, then there is a suspicion of a criminal offense and civil law claims threaten the management.
The managing director must thoroughly check whether an insolvency application should be made in the current economic situation. A lawyer specializing in insolvency law can provide legally reliable information
What are the risks for the managing director in the event of insolvency?
The managing director of the GmbH is obliged to file for insolvency in the event of insolvency. If he disregards this obligation, there is a civil liability towards the company. The representative will be prosecuted if he does not file the insolvency application or fails to do so in good time. Both deliberate and negligent acts are punished.
In the event of insolvency, the managing director still has an obligation to maintain the insolvency estate. The insolvency estate is the usable assets of the GmbH. This means that it cannot be used to pay individual creditors or the shareholders. The creditors are served from the insolvency estate as part of the insolvency procedure. The managing director is also liable under civil law and there is the possibility of a criminal conviction if the insolvency estate is reduced. The managing director should therefore seek the advice of a lawyer specializing in company law or insolvency law to avoid such disadvantages.
What happens after the insolvency application?
The insolvency court examines the insolvency application. A provisional insolvency administrator is appointed by the court. The insolvency administrator then checks the economic situation of the GmbH. There are two different options: if the GmbH’s assets are insufficient to cover the costs of the border proceedings, the insolvency proceedings are dismissed due to the lack of assets. This means that the insolvency proceedings will not be opened. The costs of the proceedings are the court costs and the costs of the insolvency administrator.
The second option is that the insolvency proceedings are opened if sufficient financial resources are still available.
What happens in the insolvency proceedings?
When the trial opens, the court will set a trial date and an exam date. A creditors’ meeting is held. This elects the final insolvency administrator. After the insolvency proceedings have been opened, the insolvency administrator leads the company. The managing director no longer has power of disposal.
In the insolvency proceedings, there is still the possibility of companies restructuring. In this case, the insolvency administrator tries to continue the company by finding an agreement with the creditors. If a reorganization fails, the company will be wound up. The administrator will collect the company’s claims. The remaining assets of the GmbH are then distributed to the creditors on a pro rata basis.