Conditions and procedures for enterprise bankruptcy

1. Subjects have the right and obligation to file petition for the bankruptcy of the enterprise

The following subjects have the right and obligation to file petition for commencement of bankruptcy procedure:

Subjects have the right to file petition: 

• Creditor

• Employees if the enterprise cannot pay wages and other debts to the employees

• The owner of state-owned enterprises

• Shareholders of Joint Stock Companies

• Unlimited liability partners of Partnership Companies

Bankruptcy is a state of insolvency of an enterprise or cooperative that is declared bankrupt by the People's Court.

Subjects have the obligation to file petition:

Businesses that are in bankruptcy. When an enterprise is in a state of bankruptcy, the business owner or the legal representative of the enterprise is obliged to file a petition to initiate bankruptcy procedure.

2. Conditions for enterprise bankruptcy

To go bankruptcy, an enterprise needs to meet the following conditions:

• Insolvent enterprise.

• There is a Court's decision to declare the enterprise bankrupt.

3. The procedure for enterprise bankruptcy

Step 1: File petition for the bankruptcy 

The enterprise files a bankruptcy petition by themselves or one or more creditors file a bankruptcy petition with the regulatory People's court.

Step 2: Assign a judge to handle

Step 3: Processing the bankruptcy application

Step 4: Accept the application form

Step 5: Open the bankruptcy procedure

Within 30 days from the date the Court accepts the application, the Judge must issue a decision to open or not to commence the bankruptcy procedure.

Step 6: Convene a meeting of creditors

Step 7: Restore the business operation

Step 8: The court issued a decision declaring the enterprise bankrupt

Step 9: Execute the decision declaring the enterprise bankruptcy

4. Legal basis:

• Law on Enterprise 2020.

• Law on Bankruptcy 2014.

5. Siglaw's services:

• Provide consultation on entities that are required to go bankrupt;

• Provide consultation on bankruptcy conditions, documents and bankruptcy procedure;

• Provide consultation on transactions that are considered void;

• Draft documents and prepare necessary documents;

• Represent clients to work with State agencies upon request.