Succeeding in the competitive market and making profits is the most important thing for any business enterprise. Sometimes these enterprises can run into trouble and bankruptcy may seem to be the only way out. Before business filing, one should look at the different angles involved and the type of filing to be made.
Generally there three types of filing which owners could use based on the kind of business that they have.
The first file type is Chapter 7 which is bankruptcy. This is the most common and appropriate file type for business which do not have any future. It can be applied by companies which are going to be shut down and when no other solution is applicable. It can be filed by solitary proprietorship where owners will be responsible for the assets and accountability of the firm. The legal entities of the company will be separated from its owner. It can also be filed when companies are having numerous debts and restructuring is impossible without any substantial assets. For the smaller companies this may well mean that the only solution is closure of the firm.
In liquidation, a trustee will be appointed for the possession of all the assets and he will distribute it among all the creditors. The proprietor will receive a discharge and will be released from all the debt obligations after the conclusion of the case.
The second file type is where a company plans to reorganize and continue with the business. The reorganization will be carried out under the supervision of a trustee who has been appointed by the court. The company owner will have to present all details to the creditor and their approval is needed to start off with the plan. Although the confirmation of the creditors could take up to an year and hence it is a time consuming process.
The third file type is one which is reserved for the consumers. It could be filed by sole proprietorship. This type of business filing will entail the organization to submit the repayment plan and state how the repayment of the debts is going to be carried out. The repayment will be based on earnings, property ownership, and debts. Filing for this type can help the owners to save their personal assets. These three types are generally applied to the smaller business organizations. It is also applied to the medium and also the larger organizations although on a smaller scale.
Filing of every proceeding in a company is important and it is not just for the filing for bankruptcy. Business entity reports should be filed as well as all other events occurring in a business organization. The procedure for filing has been described according to different chapters which say everything about how to make a business filing. The filing is important legally for all the operations of a business organization. It applies for all companies including the ones which are new. If a company is expanding or closing down all of it should be filed. Organizations should identify with all the filing requirements and should meet them strictly.