It is not profitable to cooperate with a bankrupt, sometimes it’s even dangerous. However, not all managers report bankruptcy, and therefore it makes sense to check the solvency of the company.
Publishing Bankruptcy Information
The company cannot hide information about its bankruptcy. It is required to publish this information:
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Date of commencement of the insolvency proceedings, initiator of this process.
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Bankruptcy Stage.
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Information about the administrator, who was appointed by the arbitration court.
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Other material information related to bankruptcy.
The publication of information is necessary so that all interested parties know about bankruptcy: counterparties, potential partners, government agencies. For example, an organization has a creditor. If he does not receive relevant information, he simply will not be able to collect his funds from the debtor.
When is bankruptcy verification required?
Information on the insolvency of the organization is necessary in these cases:
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A contract with a company is being prepared. Before concluding it, it makes sense to check the trustworthiness of the counterparty.
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Deciding to continue cooperation.
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Identification of solvency of legal entities.
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Deciding on whether to provide a company with a loan.
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Verification is quite simple. A simple procedure helps prevent future difficulties.
Checking legal entity
You can check the solvency of legal entities by these indirect signs:
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The presence of arbitration claims against the organization. If the value of the claim exceeds the income of the company, then this indicates the insolvency of the latter. The size of claims is recommended to check with the balance sheet.
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Positive credit history. It is necessary to check the ratio of debt to income.
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Conclusion of property. Mass withdrawal is also a reason to be wary. Typically, this procedure is performed to optimize liabilities and assets. The latter is necessary in case of problems with solvency.
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Large debt to the state and creditors.
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False leadership.
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Suspicious leadership change.
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Bulk registration address.
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Legal entity does not fulfill its obligations: does not submit financial statements, does not pay taxes, disrupts payment deadlines.
Validation is a simple procedure. It is almost mandatory before entering into major contracts. If you do not verify the information, the following negative consequences are possible:
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The organization will be given a loan, but it will not pay it.
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Debt already granted cannot be recovered, since the set time for collection has expired.
A contract will be concluded with the company, the provisions of which it will not be able to fulfill.
So, the counterparty will lose its money anyway. Be careful and make sure you co-work with a trusted partner.
