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Business Recovery

Verified 15 May 2022 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Justice

The professional recovery procedure is for the individual contractor (IS), theEIRL: titleContentand the micro-entrepreneur. It provides the company with the ability to rebound quickly by forgiving debts, without resorting to liquidation. Businesses are excluded from this scheme.

Occupational recovery shall apply toindividual contractor (IS),EIRL: titleContent or micro-entrepreneur which meets all of the following conditions:

  • Detention of active less than €15 000(this threshold is determined taking into account all professional and personal heritage of the individual contractor)
  • Have been active for more than a year
  • No court or pending prud'homal proceedings
  • No judicial winding-up within 5 years prior to the application for professional reinstatement

In order to benefit from professional recovery, the contractor must have assets of less than €15 000. The assets of the individual entrepreneur are the assets of the individual entrepreneur's personal and professional assets.

Warning  

the value of the individual contractor's principal residence is not taken into account in the asset calculation.

How?

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Trader or craftsman

The individual contractor must complete the application form for the initiation of legal proceedings (with professional reinstatement).

He must file it with the commercial court of the place where his company is based.

Application for the initiation of legal proceedings (with or without professional reinstatement)

Who shall I contact

The court shall not initiate the procedure of professional reinstatement until it has ascertained that the conditions are fulfilled.

If the contractor does not meet the requirements, the court shall reject the application and decide on the application to initiate the court.

Agricultural or liberal activity

The individual contractor must complete the application form for the initiation of legal proceedings (with professional reinstatement).

He must file it with the court of the place where his company is based.

Application for the initiation of legal proceedings (with or without professional reinstatement)

Who shall I contact

The court shall not initiate the procedure of professional reinstatement until it has ascertained that the conditions are fulfilled.

If the contractor does not meet the requirements, the court shall reject the application and decide on the application to initiate the court.

Organisation of the professional recovery procedure

The court that initiates the professional reinstatement procedure shall appoint a judge to collect any information on the amount of the liability and the value of the contractor's assets.

The court shall also designate judicial officer to assist the judge in this function.

The judicial agent shall inform creditors of the initiation of proceedings. It asks them to provide, within 2 months, the amount of their claim and the date of their maturity.

The procedure is open for a period of 4 months, without any extension possible.

Unlike what happens for a court, the contractor is not divested. It retains the power to manage and dispose of its assets.

The personal reinstatement procedure does not result in the cessation of legal proceedings.

If the Contractor is sued (or issued a formal notice) by a creditor, the judge may postpone payment of the sums due within 4 months. It may also order the suspension of enforcement proceedings (such as seizures).

Warning  

at any time during the re-establishment proceedings, the court may initiate the liquidation proceedings if it is established that the contractor is not in good faith.

Closing the career recovery will clear all claims professional or personal previous at the opening judgement. These claims must be reported to the judicial officer.

The closing judgement shall include the encrypted status of the cancelled receivables with the name or name and domicile or registered office of the creditors.

However, some debts are not written off and remain due:

  • Employee claims (salaries, paid leave allowances, etc.)
  • Maintenance claims
  • Claims arising from a criminal offence committed by the individual contractor (e.g. embezzlement)
  • Claims relating to property acquired under an estate opened during the proceedings
  • Claims relating to rights attaching to the person of the creditor (e.g. damages compensation for personal injury)
  • Claims for redemption of bonds or guarantees

No debt is forgiven when the total liability is disproportionate to the value of the asset. The principal residence of the contractor is not taken into account in the calculation of the assets.

FYI  

where the proceedings are the subject of a closing judgement resulting in the cancellation of debts, the President of the Court may decide that the Treasury shall advance the duties, taxes, or emoluments fees collected by the courts and for notification and advertising.

Formalities of the close judgement of professional recovery

Within 15 days of the closing judgement, the clerk of the court shall carry out the following formalities:

  • Insertion of the Notice of Closing Judgement in the Official Bulletin of Civil and Commercial Advertisements (Bodacc)
  • Publish to legal ad support of the place where the company has his business address
  • Insertion into the Trade and businesses Register (CSR) or Business Directory (RM)

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