We've been in business doing great for 4 years and decided to incorporate in February this year. Our business took a drastic hit and we may end up having to go out of business. If we need to can we file bankruptcy or do you have to be incorporated for a certain length of time for that?
2006-10-02 05:28:56 · 6 answers · asked by Faith 1 in Business & Finance ➔ Corporations
WHATEVER YOU DO, DON'T FILE FOR BANKRUPSY!
2006-10-02 05:37:32 · answer #1 · answered by ♥*_*♥ 2 · 0⤊ 2⤋
I'm assuming your talking about the corporation filing bankruptcy. A corporation is a legal separate person. You would first want to consider filing for chapter 13 reorganization. Go through your books with a fine tooth comb and develop a repayment schedule if you can. contact your debtors and explain your situation and most of them will probably work with you. Chapter 7 in your situation should be avoided if at all possible, heres the reason why.
The court may very well say you filed for articles of incorporation because you knew bankruptcy may be emminent in which case they will "Pierce the Corporate Vail" then your really screwed because now all your personal assets (ie house cars ect) are at risk. You really need to have the circumstances documented and your books in order. Especially important is the coprorate book which contains all meetings,resolutions,stockholders ledger,licenses, Articles of incorporation and by-laws. If this is not up to date you already lost because it is state statute.
The reorganization effort is the best and if you can accomplish this without filing for a Chapter13 thats the best method.
You can also dissolve it through corporate resolution sell everything and pay what you can, file dissolution papers with the State and let the chips fall where they may, but I guarantee you creditors will take you to court and go after your personal assets.
Just some things to discuss with your directors how ever many their are. Corporation law is the same for a one person corp or a multi-million shareholder corp. it doesn't matter.
Good luck to you
P.S. Start with a projected cash flow analysis
2006-10-03 05:19:09 · answer #2 · answered by Anonymous · 0⤊ 1⤋
You can file BK at any time you wish Inc or not. But here is the thing, If you think that you are saved because of this Incorparation you are not.
You still will have to sell out all assets that you may have to cover the past bills and debts to creditors.
Laws changed last october 2005 to file BK so i would check on all of this as they changed them to make it harder to file and stop nonsense chapter charge offs.
2006-10-02 12:32:22 · answer #3 · answered by twism 3 · 0⤊ 0⤋
No - any time is good if the news is bad. If you can't continue then just wrap up the paperwork and call it quits (you might need to notify whatever agency registered the incorporation or they will keep sending you tax bills).
2006-10-02 12:31:47 · answer #4 · answered by Rich Z 7 · 0⤊ 1⤋
You can file bankruptcy whenever you want.
2006-10-02 12:30:42 · answer #5 · answered by Anonymous · 0⤊ 1⤋
yes u can. but for that u have to show that ur liabilities r more then ur assets
2006-10-02 12:38:01 · answer #6 · answered by love guru 1 · 0⤊ 1⤋