Chatnued - Rules for liquidating a company
A debtor may be declared bankrupt through its own motion or a petition filed by any creditor or the public prosecutor.Bankruptcy is the standard insolvency liquidation procedure and is aimed at selling or realising all of the assets of the debtor and paying any creditors.A debtor conducting a business activity is considered insolvent when it cannot meet its own obligations as they fall due.
Creditors are paid with the proceeds of the sale of the business and other company assets.
Administrative liquidation is a special liquidation procedure in which the entity is liquidated under the control of the relevant administrative authority that oversees the industry in which the entity is active (eg, the Bank of Italy for banks and financial institutions and the Insurance Supervisory Authority for insurers).
In an orderly voluntary liquidation, a liquidator is appointed by the shareholders and, if the company’s assets are not forecasted to be sufficient to pay all creditors in full, the liquidator must file for bankruptcy liquidation or a restructuring procedure.
None of the effects of bankruptcy liquidation occur in a voluntary liquidation: the liquidator remains in full control and there is no court intervention or supervision, as the company is not insolvent.
In extraordinary administration, the sale of the business must be completed within a year (the term can be delayed for another year).