Bankruptcy
Validation date: 07/2011Legal requirements
Entrepreneurs may be able to avoid bankruptcy by anticipating difficulties - if they keep a close eye on the financial situation of their business.
The Italian legal measures on insolvency and bankruptcy have recently been modified.
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Reform of insolvency procedures
Insolvency procedures
Bankruptcy occurs when businesses become insolvent and can no longer meet their obligations.
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Guide to insolvency procedures and the latest reforms
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Responsible bodies
The bankruptcy process is implemented by the competent bankruptcy court. The bankruptcy procedure requires recognition by this court that the business concerned is insolvent.
Entrepreneurs having experienced bankruptcy should not lose confidence in their ability to embark on a new business.
Administrative procedures
Bankruptcy procedure: a step-by-step guide
The business owner, creditors and public prosecutor can apply to the competent court for a bankruptcy declaration.
The owner must lodge all financial and commercial details for the previous three years, an assessment of activities and a list of creditors with the office of the court.
Once declared bankrupt, the business owner loses his or her corporate assets, which are administered by a court-appointed receiver.
Within 60 days of the declaration of bankruptcy, the receiver must submit a report on the circumstances behind the bankruptcy. This must include an inventory of assets and a liquidation programme.
Court decision
The debtor and the person or body initiating the bankruptcy are summoned by the court, which verifies all documents, written statements and technical reports submitted by the parties.
Bankruptcy is not permitted if the outstanding debt (ascertained during pre-insolvency proceedings) is below EUR 30 000.
Temporary administration can be authorised, but may be revoked at any time by either the competent court or by the bankruptcy court.
Legal texts
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Legislative Decree No 169 of 12 September 2007 (Official journal No 241 of 16 October 2007) - Regulation on bankruptcy, composition with creditors, receivership and forced liquidation
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Legislative Decree No 5 of 9 January 2006 (Official journal No 12 of 16 January 2006) - Organic reform of regulations for insolvency procedures in accordance with Article 1(5) of Law No 80 of 14 May 2005
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Law No 80 of 14 May 2005 (Official journal No 111 of 14 May 2005) - Conversion to law, with modifications, of Decree Law no. 35 of 14 March 2005, governing urgent regulations regarding the plan of action for economic, social and territorial development. Government powers to amend the Code of Civil Procedure in the areas of the appeal process and arbitration, as well as for organic reform of the regulations for insolvency procedures
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Royal Decree No 267 of 16 March 1942 (Official journal No 81 of 6 April 1942) - Regulation of bankruptcy, composition with creditors, receivership and forced liquidation
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