Company Administration in Case of Insolvency
Company Administration in Case of InsolvencyUpdated on Monday 15th October 2018
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Company administration in case of insolvency is a manner in which it is attempted to rescue the business and return the company to a state in which it can continue its activities. Our Danish lawyers answer some of the most important questions about this process.
What is company administration?
Administration is a process that aims to help a company avoid liquidation. Whenever possible, it is preferred to enter into a company administration process for the purpose of rescuing the company as opposed to entering into liquidation and offering the assets to satisfy the claims of the creditors.
One of our attorneys in Denmark can help analyze your situation and determine if this is a suitable method for a company.
When can companies enter into administration?
Companies can enter into administration when it is insolvent or it is likely to become insolvent within a short period of time; the process cannot be commenced if this is no the case. The application for administration can be made via a court order by one or more creditors. Alternatively, the company director or a liquidator can apply for commencing the administration.
How do Danish company enter into administration?
When the process is underway, Danish companies required to offer their property and assets to the administrator who will thereafter have broad control over the company’s assets. He can handle the assets as needed and perform all of the needed actions, according to the interest of the creditors.
In many cases during administration part of the company’s assets will be sold. However, entering into administration does not mean that the Danish employees will be laid off. One of our lawyers in Denmark can give you more details about the payment and treatment of employees during administration.
What is the role of the administrator?
The administrator is an agent who will have a duty to act diligently, in good faith and to the best interest of the creditors. When managing the assets and property of the company, be must do so impartially.
At our law firm in Denmark, we have experience in dealing with various situations in which companies may face difficulties and need administrative procedures. Entrepreneurs who are having business issues or those who wish to know more about the insolvency laws in the country can contact us.