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⚖ Insolvency · Insolvabilité
Company Bankruptcy — Legal Guide Law on Entrepreneurs (2024) · Insolvency Proceedings Attorney Nikoloz Pkhaladze · Corporate Law |
Insolvency does not mean failure — it is a legal instrument that offers entrepreneurs a lawful solution to systemic debts. In Georgia, this procedure is provided for by the Law on Entrepreneurs and the Law on Insolvency Proceedings.
Bankruptcy Procedure — Step by Step
| 1 | Determining Signs of Insolvency Law on Insolvency Proceedings, Art. 3
A company is considered insolvent if it cannot fulfill more than 50% of its due obligations or its assets are less than its liabilities. Financial analysis is required. |
| 2 | Filing an Insolvency Application with the Court Law on Insolvency..., Arts. 12–15
The claim is submitted to the commercial registration court. The following must be filed: balance sheet, list of creditors, inventory of assets, list of liabilities. |
| 3 | Appointment of External Manager / Administrator Law on Entrepreneurs (new ed.) Art. 72¹
The court appoints an external manager who assumes control of the company. The director’s authority is suspended. This stage is within 30 days. |
| 4 | Creditors’ Meeting and Rehabilitation Plan Law on Insolvency..., Arts. 29–35
Creditors request claim recognition within 60 days. A rehabilitation agreement, debt restructuring, or liquidation procedure is possible. |
| 5 | Asset Distribution / Liquidation Law on Entrepreneurs, Arts. 74–80
In liquidation, assets are distributed according to statutory priorities: first — employees, then — creditors, finally — shareholders. |
| 📋 Main Legal Framework
▸ Law on Entrepreneurs (2024 new ed.) — Arts. 8, 72¹, 74-80 ▸ Law on Insolvency Proceedings (2006 (last amend. 2023)) — Arts. 3, 12, 29-35 ▸ Civil Procedure Code (— filing a claim) — Art. 178 et seq. |
⚠ Important
Delay in initiating bankruptcy proceedings results in liability. Under the new edition of the Law on Entrepreneurs, the director is obliged to apply to the court within 21 days from the identification of insolvency signs; otherwise — personal civil liability. |
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Contact us for consultation · +995 597 117795 |
