Entrepreneurs may be able to avoid bankruptcy by anticipating difficulties - if they keep a close eye on the financial situation of their business.
The Bankruptcy Act contains rules on bankruptcy, suspension of payment and the refinancing of debts.
If you are in debt and no longer able to keep up repayments, you may ask the court for permission to go into liquidation. Bankruptcy is generally considered a last resort. The courts can put a company into liquidation on behalf of at least two creditors and two outstanding debts (at least one of which will have fallen due). The company must have ceased payments.
Entrepreneurs having experienced bankruptcy should not lose confidence in their ability to embark on a new business.
Bankruptcy procedure: a step-by-step guide
Different stages of the bankruptcy procedure:
- Control by an insolvency practitioner (in administration): while a company is in administration, the administrator is the only person authorised to take any action. He or she draws up as quickly as possible a description of the business's assets and debts.
- Inspection and agreement : if the company is not liquidated on insolvency grounds after the administration procedure, the administrator will verify whether the claims of the creditors are justified. The company can submit a proposal to its creditors.
- Liquidation and distribution arrangements : the insolvency procedure begins when an agreement cannot be reached. The administrator will sell the assets and any profits from sales will be distributed among the creditors.
- End of procedure
The administrator may decide to continue the business as a going concern if this is in the interests of the general body of creditors. This requires permission from the court. The court can fix a moratorium period during which creditors are barred from laying claim to their entitlements.
During this period, staff are entitled to a maximum of 13 weeks unpaid wages and a maximum paid dissolution period of six weeks. If your business is unable to pay, UWV will take over this obligation.
Suspension of payment is a general judicial settlement based on a court decision to save bankrupt parties from immediate liquidation.
Liquidations have to be recorded in the trade register.
You need to ask yourself the following questions :
- Do you stand to lose your private possessions as well as your business assets?
- Is it just your business that is bankrupt, or also you privately?
- What are your rights and obligations?
Further information can be found below:
The Tax Authority provides information on fiscal matters related to liquidation.
Information from the Dutch government can be found on the Antwoordvoorbedrijven.nl website, which lists at a glance all the various relevant dos and don'ts, e.g. licences and requirements, laws and regulations, taxes and subsidies.