Company Bankruptcy Declaration

It should also be borne in mind that the business may be restored through the remedial proceedings provided for in the Act of 15 May 2015, the Restructuring Law. Under this Act, four types of restructuring proceedings are distinguished. Depending on the chosen model, the debtor entrepreneur may even benefit from total protection against enforcement. Among restructuring proceedings whose primary aim is to preserve the business, a distinction must be made between proceedings for the approval of an arrangement, accelerated arrangement proceedings, arrangement proceedings and remedial proceedings. The principle of priority of a restructuring application should be remembered when both a restructuring application and a bankruptcy application are filed. This matter is regulated respectively by Article 11 of the Act of 15 May, the Restructuring Law, and Article 9b of the Act of 23 February 2003, the Bankruptcy Law.

A company's bankruptcy is declared by a court order, which should be issued within two months from the date on which the bankruptcy application is filed. This is an instructive time limit for the court. A debtor operating as a sole proprietor is required to file a bankruptcy application with the court no later than thirty days from the date on which the grounds for declaring bankruptcy arose. Until 31 December 2015, this period was 14 days, but the rational legislature, taking into account market and economic realities as well as the time needed to choose between restructuring and bankruptcy, extended it to 30 days. It is worth recalling here that the definition of an insolvent debtor has changed. Pursuant to Article 11 of the Act of 28 February 2003, the Bankruptcy Law, a debtor is deemed insolvent if the debtor has lost the ability to perform due monetary obligations as they fall due. There is a rebuttable presumption that the debtor has lost the ability to perform due monetary obligations if the delay in performing monetary obligations exceeds three months. Before creditors make a hasty decision—for example, on the 14th day of non-payment—to file a bankruptcy application against an entrepreneur, one decisive factor may be the advance payment for expenses incurred during proceedings concerning the declaration of bankruptcy. This advance is equal to the average monthly remuneration in the enterprise sector, excluding payments of profit-related bonuses, in the third quarter of the previous year, as announced by the President of the Central Statistical Office. Proof of payment of the advance should be attached to the bankruptcy application. A company's bankruptcy application may be filed by the debtor or any of the debtor's personal creditors.

The application for declaring a company's bankruptcy should meet the requirements applicable to a procedural document and, in particular, should comply with Article 22 of the Act of 28 February 2003, the Bankruptcy Law. Thus, every application for declaring a company's bankruptcy should contain the debtor's details, such as the first and last name and the business name—that is, the debtor's first and last name together with any additional designation—PESEL number or, if unavailable, information enabling unambiguous identification, and the place of residence or registered office. It should also indicate the place where the debtor's main center of primary activity is located. The circumstances justifying the application and their substantiation should be presented reliably. It is important to indicate whether the debtor participates in a payment system or a securities settlement system governed by Polish law or the law of another Member State, within the meaning of the Act of 24 August 2001 on the finality of settlement in payment systems and securities settlement systems and the rules of supervision over those systems, or whether, without being a participant, the debtor operates an interoperable system within the meaning of that Act, where the application is filed by the debtor. The foregoing does not apply to a creditor. It should also indicate whether the debtor is a public company. Filing an application by the debtor requires, in particular, the attachment of an up-to-date list of assets with an estimated valuation of its components and a balance sheet prepared by the debtor as at a date falling within the thirty days preceding the date of filing the application. Further requirements are set out in Article 23 of the Act of 28 February 2003, the Bankruptcy Law. A debtor entrepreneur has the opportunity to enter into an arrangement in bankruptcy. Entering into an arrangement in bankruptcy proceedings by an entrepreneur is provided for in Articles 266a–266f of the Act of 28 February 2003, the Bankruptcy Law. Arrangement proposals may be submitted by the bankrupt person, a creditor or the trustee. Bankruptcy of a natural personwho has ceased conducting business activity may file an application for consumer bankruptcy as early as the day after ceasing activity, including where the business activity has been suspended.