Can I start a new company during insolvency?
February 25, 2023 | 40,00 EUR | answered by Katja Winterberg
Dear bankruptcy lawyer,
My name is Adele Sauer and I am currently in bankruptcy. Due to economic difficulties, I had to take this step and am now facing various challenges. During this difficult time, I am wondering if I am allowed to start a new company while in bankruptcy.
I am a passionate entrepreneur and have experience in founding and running businesses. Despite my current financial situation, I do not want to give up and am looking for ways to professionally reorient myself. Starting a new company could be an opportunity for me to start fresh and take control of my future.
However, I am unsure if this is legally possible while in bankruptcy. I am worried that this may violate current laws or could affect my bankruptcy proceedings. Therefore, I am seeking your expert opinion and advice on this matter.
Can you provide me with information on whether I am allowed to start a new company during bankruptcy? Are there legal regulations that prohibit this or come with restrictions? What possible consequences would I have to face if I take this step? And what steps would I need to take to ensure that this is legally permissible?
Thank you in advance for your support, and I look forward to your professional guidance on this matter.
Sincerely,
Adele Sauer
Dear Mrs. Sauer,
Thank you for your inquiry regarding the establishment of a new company during your insolvency. It is understandable that you are looking for new professional perspectives during this difficult time and considering a new start-up. I am happy to provide you with a detailed assessment on this matter.
In general, it is possible to establish a new company during an ongoing insolvency. However, there are some legal aspects to consider. Firstly, it is important to mention that as an insolvent individual, you are obligated to disclose all income and assets. This means that the earnings from your new company must be reported to the insolvency administrator.
Furthermore, establishing a new company can have implications on your insolvency proceedings. Your insolvency administrator may examine whether the creation of the new company is compatible with your duties as an insolvent debtor. If the establishment affects your insolvency estate or prejudices your creditors, this could lead to legal consequences.
Another important point is the liability when starting a new company during insolvency. As an insolvent debtor, you are generally required to satisfy your creditors. If the new company also encounters financial difficulties and needs to declare insolvency, this could pose problems as your insolvency administrators may assert claims from the insolvency of your new company.
To ensure that the establishment of a new company during your insolvency is legally sound, I strongly recommend seeking professional advice. An experienced insolvency lawyer can assess your individual situation and provide you with specific recommendations. They can also assist you in minimizing potential risks and avoiding legal pitfalls.
In conclusion, it is possible to establish a new company during insolvency, but it is advisable to thoroughly research and seek advice to avoid legal issues.
I hope that this information has been helpful to you. If you have any further questions or require personal consultation, I am at your disposal.
Best regards,
Katja Winterberg
Insolvency Lawyer
