Consequences of being held subsidiarily liable
Posted: Sun Jan 19, 2025 9:01 am
In a situation where the founder is nevertheless held subsidiarily liable and must cover the company's debts, his personal funds and property assets, including those acquired before joining the organization, will be demanded to pay off the obligations. In this case, uniform rules on civil bankruptcy apply, and the person will be deprived of luxury items, vehicles and valuable documents.
The debtor will be left with only one property, property necessary to satisfy personal needs, and financial resources for their acquisition in the amount of the annual subsistence minimum of the family.
In situations where no assets are found to pay off the debt, bank cards and accounts will be seized. The debtor will not be able to travel abroad while bailiffs are working on the writ of execution.
In addition, creditors may file a petition for personal bankruptcy of the founder of the defendant company.
How a founder can protect himself from subsidiary liability
Article 10 of the Federal overseas chinese in australia data Law "On Bankruptcy" states how to avoid subsidiary liability of the founder. To do this, it is necessary to provide confirmation that the financial insolvency of the enterprise arose under the influence of external or internal conditions that the shareholder could not influence. In a number of situations, the founder must present evidence of his innocence:
If he entered into or authorized transactions that resulted in losses for the company.
If there is evidence that there was no withdrawal of the organization’s assets prior to the bankruptcy.
In the event of unprofitable transactions, for which a profit was planned before signing the contracts.
If the company has not submitted financial statements or the documents contain false information.
When third-priority creditors put forward claims in the amount of more than 50% of the claims of the remaining creditors.
How a founder can protect himself from subsidiary liability
The Supreme Court Plenum Resolution No. 53 of December 21, 2017 states that the founder may be released from liability if he proves that he was informed of the deterioration of the financial situation by the company's director. The owner of the company may also provide confirmation that he:
Actively raised funds to rehabilitate an organization that was on the verge of bankruptcy.
Provided a loan or credit to an enterprise.
Stopped demanding repayment of debts.
Granted a deferment to a related party under a purchase, sale, or lease agreement.
He meticulously analyzed the primary documents on transactions (for example, he submitted a request for the provision of original contracts and acts).
Demonstrated prudence in choosing suppliers (for confirmation, you can order reports from specialized services, which is proof for creditors).
The debtor will be left with only one property, property necessary to satisfy personal needs, and financial resources for their acquisition in the amount of the annual subsistence minimum of the family.
In situations where no assets are found to pay off the debt, bank cards and accounts will be seized. The debtor will not be able to travel abroad while bailiffs are working on the writ of execution.
In addition, creditors may file a petition for personal bankruptcy of the founder of the defendant company.
How a founder can protect himself from subsidiary liability
Article 10 of the Federal overseas chinese in australia data Law "On Bankruptcy" states how to avoid subsidiary liability of the founder. To do this, it is necessary to provide confirmation that the financial insolvency of the enterprise arose under the influence of external or internal conditions that the shareholder could not influence. In a number of situations, the founder must present evidence of his innocence:
If he entered into or authorized transactions that resulted in losses for the company.
If there is evidence that there was no withdrawal of the organization’s assets prior to the bankruptcy.
In the event of unprofitable transactions, for which a profit was planned before signing the contracts.
If the company has not submitted financial statements or the documents contain false information.
When third-priority creditors put forward claims in the amount of more than 50% of the claims of the remaining creditors.
How a founder can protect himself from subsidiary liability
The Supreme Court Plenum Resolution No. 53 of December 21, 2017 states that the founder may be released from liability if he proves that he was informed of the deterioration of the financial situation by the company's director. The owner of the company may also provide confirmation that he:
Actively raised funds to rehabilitate an organization that was on the verge of bankruptcy.
Provided a loan or credit to an enterprise.
Stopped demanding repayment of debts.
Granted a deferment to a related party under a purchase, sale, or lease agreement.
He meticulously analyzed the primary documents on transactions (for example, he submitted a request for the provision of original contracts and acts).
Demonstrated prudence in choosing suppliers (for confirmation, you can order reports from specialized services, which is proof for creditors).