Restructuring and liquidation are legally regulated procedures that govern the status and property relations of companies, either with the aim of continuing operations under changed conditions or for the orderly termination of business.

Restructuring, in accordance with the Law on Voluntary Financial Restructuring, is applied in situations where a company experiences serious financial difficulties but is not insolvent. The purpose of this procedure is to establish sustainable relations with creditors and restore liquidity through out-of-court agreements. These agreements typically include redefining payment deadlines, reducing obligations, converting receivables into equity, or changing ownership and organizational structure.

Liquidation, on the other hand, represents a legally regulated method for terminating the operations of a company that is solvent at the moment the decision to liquidate is made. It can be voluntar – when the decision is made by the company’s members or competent officials, or compulsory – when the legal conditions for initiating the procedure are met by the Business Registers Agency. During liquidation, a liquidator is appointed, and the company operates under the status “in liquidation” until it is removed from the register.

The procedure involves preparing the initial and final balance sheets, calling creditors to submit claims, settling liabilities, and distributing the remaining assets to the company’s members. Financial reporting during the procedure is conducted in accordance with the Accounting Law and special rules applicable to companies in liquidation.

The liquidator bears legal responsibility for the legality of the procedure and the protection of creditors’ interests. Company members may be held liable up to the amount of assets received if it is determined that creditors were left unpaid.

Choosing between restructuring and liquidation requires a legal assessment of the specific case and a comprehensive understanding of the legal consequences. Proper execution of each step of the procedure contributes to legal certainty, protection of creditors’ and members’ interests, as well as preservation of the reputation and legal integrity of the business entity.