Peculiarities Legal Norms Regulating Insolvency
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Abstract
Lithuania is currently undergoing the development of new social relations and new legal norms that not only facilitate the emergence of economic entities but also simplify the procedure of their discontinuation. One of the main elements of discontinuation relates to insolvency (failure of an economic entity to fulfill its monetary obligations in relation to its financial and credit liabilities). It is this criterion that enables to distinguish when a company is profitable and when it is operating at a loss, and when the state needs to intervene in order to protect a certain public or private interest.
Solvency is an economic concept regulated by legal norms. This term is discussed in relation to business economics, microeconomics, financial analysis as well as other economic sciences; however, in this work economic concepts and theory will only help to mould key theses and conclusions, while the problems of solvency will be discussed from the point of view of legal effectiveness and justice. The work analyses, by means of different methods, insolvency proceedings, conditions determining insolvency, grounds for instituting bankruptcy proceedings, conditions necessary to address a court with a request to recognize a company insolvent, the main financial criteria – indicators allowing the conclusion that an economic entity is insolvent. It also tries to search for the most acceptable concept of insolvency and for solutions to the problems arising in an attempt to determine whether a company is insolvent or not.
The article reveals the content of legal norms regulating insolvency (laws, secondary legislation, court decisions), describes how insolvency proceedings are regulated in other legal systems, what problems arise in an attempt to determine insolvency and their possible solutions, and discusses the impact of insolvency taking into account the existing economic conditions.
Solvency is an economic concept regulated by legal norms. This term is discussed in relation to business economics, microeconomics, financial analysis as well as other economic sciences; however, in this work economic concepts and theory will only help to mould key theses and conclusions, while the problems of solvency will be discussed from the point of view of legal effectiveness and justice. The work analyses, by means of different methods, insolvency proceedings, conditions determining insolvency, grounds for instituting bankruptcy proceedings, conditions necessary to address a court with a request to recognize a company insolvent, the main financial criteria – indicators allowing the conclusion that an economic entity is insolvent. It also tries to search for the most acceptable concept of insolvency and for solutions to the problems arising in an attempt to determine whether a company is insolvent or not.
The article reveals the content of legal norms regulating insolvency (laws, secondary legislation, court decisions), describes how insolvency proceedings are regulated in other legal systems, what problems arise in an attempt to determine insolvency and their possible solutions, and discusses the impact of insolvency taking into account the existing economic conditions.
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Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.
