The new “company in crisis” special regime will become effective on 1 January 2016. It applies to limited liability companies, joint-stock companies and limited partnerships in which the general partner is not an individual.
A company is deemed to be in crisis when it is insolvent (within the meaning of the Insolvency Act) or at risk of becoming insolvent, which is the case if a company’s equity (registered capital, reserve fund, other capital funds, etc.) to debt ratio is lower than 4/100. This will increase to 6/100 on 1 January 2017 and to 8/100 the year after.
The statutory body of a company in crisis is under a general duty of care and must take all steps that would normally be taken by a reasonably diligent person to overcome the crisis.
In addition to existing limitations on dividend payments, a company is prohibited to pay dividends if, given all circumstances, such payment would lead the company to crisis.
Additionally, loans and similar payments extended to a company in crisis by its statutory body (director), a proxy, a member of the supervisory board, a shareholder holding at least 5% of capital, or an associated person, are treated as equity under the special regime and any refund of such contributions by the company during the crisis is prohibited.
Further, when a security (guarantee, pledge, etc.) is provided by the above-mentioned persons to secure an obligation of a company in crisis, the company’s creditor is entitled to be satisfied directly from such security, without the need to exercise its right against the company first (which would be the normal procedure). The above-mentioned persons may not be reimbursed for the provided security as long as the company remains in crisis or would become in crisis as a result.