A company’s bankruptcy is determined by specific factors and a legal procedure.
With our expertise in corporate law, we have used this case to address your inquiries regarding this risk and preventative measures. VitrineMedia is a company that specializes in digital and illuminated advertising. It is important to examine VitrineMedia’s case because of its economic features, which may indicate insolvency. It is imperative that you get in touch with a lawyer that specializes in liquidations and bankruptcies when facing bankruptcy. He can provide you with advice on the best course of action and how to safeguard your suppliers and customers.
What is a bankrupt company?
The first sign of a failing corporation is actually very straightforward. When a company’s obligations exceed its assets, it is considered bankrupt. Stated differently, when the total amount of its debt exceeds all of its assets. That is to say, for instance, that it has what are known as fixed assets—its buildings and equipment. Invoices, product inventories in bank accounts, and accounts payable, receivable, if they are in credit, are also included. We refer to these as the present assets.
What is VitrineMedia’s current financial state?
First and foremost, it’s critical to formally confirm VitrineMedia’s financial stability. You only need to look up VitrineMedia’s registration number, 481980704, in the Chamber of Montpellier’s RCS record, the Chamber of Commerce’s register, to do this. or with the Infogreffe registration.
What is the economic situation of VitrineMedia?
First, it is important to officially verify the economic health of VitrineMedia. To do so, you can just have to consult the register of the Chamber of Commerce, called RCS, at the Chamber of Montpellier where VitrineMedia is registered under the number 481980704. Or with the register of the Infogreffe.
Here is what the accounts say, which must be filed every year for any company in France.
The key figures filed and published with the Chamber of Commerce of Montpellier say this:
| Year | Turnover | Result | Staff |
| 12/31/20020 | € 1,866,319 | € – 18,299 | 21 |
| 12/31/2019 | € 3,196,873 | € – 190,761 | 21 |
| 31/12/2018 | € 2,021,370 | € – 113,200 | – |
As a result, it is evident that VitrineMedia filed negative and extremely concerning balance statements with the Chamber of Commerce. This indicates that VitrineMedia has lost money for three years running starting January 2018. This is extremely dangerous and puts the firm in jeopardy. It’s a severe matter.
Poor performance indicates that VitrineMedia has little capacity for debt, which increases the company’s danger of going bankrupt. The information is available on the Infogreffe.
Sadly, VitrineMedia has to face the fact that there is no magic bullet for unfavorable financial reports. And that the reasons might include poor cash flow management, mistakes made in business administration, excessive and unmanageable operational costs, or poor accounting practices inside the organization. In this situation, it would be essential to shorten the client collection times.
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What should I do if a corporation files for bankruptcy?
Reading the statute no. 94-475 of June 10, 1994, which deals with the treatment and prevention of company challenges, is advised. The management of a bankrupt firm have 45 days from the time the state of suspension of payment is noticed to the crucial step of declaring the bankruptcy to the commercial court. This is a legal general norm. There are repercussions for making such a statement. Depending on the kind of business, it must be made at the district court or commercial court clerk’s office.
Then comes the following procedure:
a) An official court process for the company’s liquidation
To enable the corporation to pay off its obligations in full, the decision is made to sell its assets. This results in the business’s ultimate closure. Depending on how difficult the case is, the process might take many years or only a few months. The liquidating firm is then required to submit a profit and loss statement to the authorities within 60 days or two months after the date of liquidation. As a result, the dissolved company’s cancelation is noted and the topic of an article that appears in the official journal.
b) A court-ordered restructuring of the business
A court recovery procedure will involve an examination of the company’s assets and obligations. This option aims to evaluate if a reorganization of the corporation is possible. If a buyer is interested, it may also serve as a transitional stage before the firm is sold.
What are the consequences of bankruptcy?
a) Consequences of bankruptcy on the company
As we saw earlier, the consequences for the company are these two options: The liquidation of the company or the judicial recovery of the company. In the worst case, the company risks the worst case, the company will disappear completely. In the best case, it will be subject to a close supervision in order to monitor in order to proceed to its recovery if however it is successful.
b) Consequences of bankruptcy on the manager
Let’s now look at the consequences for the manager of this company. Because this one is not without responsibility and without any risk if he has committed faults. The director could be sanctioned in several cases.
Risk of being prohibited from managing any business
The manager might be subject to this punishment even if they have only committed little management mistakes. For instance, if he or she has merely chosen not to submit the payment cessation statement within the allotted period. The company’s director will no longer be allowed to oversee, manage, or run a business.
The responsibility of the director for insufficient assets
In this case, the situation is quite different from the others. Here the liability of the director will be personally condemned to pay the debts or rather the lack of assets that would have allowed to pay the which would have allowed the payment of the totality of the liabilities. Because it is a sanction and a mismanagement of the company for the manager.
The personal bankruptcy of the manager
Probably the heaviest sanction against the manager. If the court considers that the manager has committed a serious fault, there is then a decision of prohibition to manage a company or any company.
This can even go as far as the impossibility for him to have and exercise a public position and to be elected
How can one stay out of bankruptcy?
Regardless of the activity, he must always have adequate understanding of the management and administration of his business to prevent it from going bankrupt. First and foremost, you must work efficiently and plan ahead for your job. The creation of a business strategy is frequently the initial step.
It is imperative to use extreme discipline in managing funds. Because its lack of management might swiftly result in company going out of business due to payment default. This calls for effective inventory control, timely supplier payments, and, in the event that credits are granted to clients, strict adherence to those terms is required in order to facilitate prompt payment. Not to mention the hassle of pursuing delinquent bills.
Another very critical point is the control of the company’s expenses (fixed and variable expenses). The rent is a fixed charge, and no matter the level of activity, the rent does not vary does not vary. The purchase of products or raw materials are variable expenses in correlation with the activity of the company. They can therefore vary and are more easily controlled.
We have now seen what constitutes a company’s eligibility for bankruptcy. further to the ramifications of the legal process in such a circumstance. Just like in Vitrine Media’s instance, if its fixed assets fall short of its liabilities. It would be extremely difficult to turn things around in this catastrophic condition unless an audit with a substantial cost reduction and rearrangement of its operation was implemented.
