Bankruptcy Law in Russia
Bankruptcy Law in RussiaUpdated on Saturday 15th December 2018
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Russia has come a long way in helping companies and individuals unable to pay their debts. During the last several years, the government has enabled the Personal Bankruptcy Law, and also amended the existing Bankruptcy Law which was available for companies only until 2015. If until 2014, the debtor and central authorities were allowed to begin bankruptcy proceedings only after a court order was issued, according to the new law the list of creditors allowed to file for insolvency or bankruptcy of an indebted company was enlarged. The minimum amount which can be claimed has also increased in the case of private companies to 300,000 rubles and 100,000 rubles in the case of public companies.
Our lawyers in Russia can offer complete information on the content of the new Commercial Bankruptcy Law.
The new Federal Law No. 127-FZ on Bankruptcy and Insolvency in Russia
Federal Law No. 127-FZ was first proposed in 2014 and undergone several changes before being enacted in 2015. The new Russian Bankruptcy Law provides for the following changes:
- - new proceedings for the commencement of insolvency and bankruptcy procedures;
- - the introduction of the process through which a company’s chief executive office is required to notify the creditors about the business’ bankruptcy;
- - the introduction of additional security measures for creditors;
- - new regulation through which the transactions of an insolvent company may be challenged.
Additionally, the new Bankruptcy Law allows employees to file a petition with the Commercial Court in Russia requesting the bankruptcy procedure to begin. Our Russian attorneys can offer more information on how to file such petition with the court.
Bankruptcy procedures in Russia
The bankruptcy legislation provides for private and public companies, as well as for sole trading companies to first prove they are not able to pay their debts before starting the insolvency proceedings followed by the bankruptcy ones. Moreover, these companies may also undergo corporate restructuring and try to remain solvent. If these measures fail, there are two ways of starting bankruptcy procedures:
- - the voluntary ones;
- - the involuntary ones.
Following any of the two procedures, the company will undergo liquidation.
If you need more information on the new Bankruptcy Law, please contact our Russian law firm.