Corporate reorganisation
Corporate reorganisation is a court-approved measure aimed at organising the payment of your company’s debts, avoiding bankruptcy and ensuring the continuation of operations.
Corporate reorganisation can be applied to all forms of business. Alternatively, private traders or self-employed persons may also apply for a debt arrangement for a trader.
The earlier the reorganisation is initiated, the more likely it is to succeed.
You can apply for a basic reorganisation if your company is insolvent, but not insolvent to the extent that it would not be possible to remedy the situation through reorganisation.
A creditor may also seek to initiate the reorganisation of your company alone or together with your company.
Corporate reorganisation is not possible if
- the reorganisation programme is unlikely to make your company solvent again
- your company is unable to pay its debts that have accumulated after the start of the reorganisation or the costs generated by the reorganisation
- the purpose of the reorganisation would be to prevent the collection of debts or other violation of the creditors’ or debtors’ rights
- the conditions for the implementation or approval of the reorganisation programme do not exist, for example, the creditors do not have enough trust in your company
- there are inadequacies in your company’s bookkeeping
- there is criminal conduct in you company, such as accounting fraud.
In addition to the basic reorganisation, your company may have the opportunity to initiate
You can initiate early reorganisation proceedings already if your company is threatened with insolvency. There are also fewer obstacles to the commencement of early reorganisation proceedings than basic reorganisation proceedings.
Call the Financial counselling for entrepreneursOpens in a new window. when you want more information about reorganisation or to find out about your company’s possibility of applying for corporate reorganisation.
In corporate reorganisation, a restructuring programme is prepared for your company, which sets out what needs to be changed in your business operations and how your company’s debts are arranged. Reorganisation usually lasts for between 5 and 10 years.
Read more about the phases of the reorganisation proceedings
In a corporate reorganisation, the court appoints an administrator for your company. Their task is to determine how your business operations can be rehabilitated. The administrator conducts negotiations with your company and its creditors to find solutions to the problems affecting your business operations.
The administrator
- prepares a preliminary report on your company. The preliminary report includes, e.g., the essential information required on the application for reorganisation concerning your company’s situation and the reasons for the financial difficulties, as well as an assessment of your company’s assets, liabilities and other commitments, and an assessment of the viability of your business and the means of reorganisation.
- prepares a proposal for a reorganisation programme in cooperation with your company, its creditors and external experts.
- monitors and supervises the operations of your company until the court has approved the reorganisation programme.
As the entrepreneur, you will be in control of your company also during the reorganisation procedure. However, you will not be able to sell any property of your company or take out a debt without the administrator’s permission, for instance.
Corporate reorganisations and the work of the administrators are supervised by the Bankruptcy Ombudsman.
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