What impact does insolvency have on my personal liability?
February 27, 2023 | 40,00 EUR | answered by Emma Fischer
Dear bankruptcy attorney,
my name is Daniel Ullmann and I am currently facing a difficult situation. My company is in financial distress and I am considering whether bankruptcy is inevitable. In this context, I am very concerned about my personal liability. I have invested a lot of time, energy, and money into my company and naturally do not want to put my personal assets at risk.
My current situation is as follows: My company has accumulated high debts and revenues are declining sharply. I have tried to improve the situation through cost-saving measures and new business models, but so far there has been no improvement. Now I am wondering what impact bankruptcy could have on my personal liability.
My concerns are that my creditors may be able to access my personal assets to settle their claims. Therefore, I would like to know from you what the risk is that I will have to personally bear liability if my company becomes insolvent. Are there ways to limit or avoid my personal liability?
I would be very grateful if you could provide me with specific information on the legal framework and suggest possible solutions. I hope that you can help me minimize my personal liability in this difficult situation.
Thank you in advance for your assistance.
Sincerely,
Daniel Ullmann
Dear Mr. Ullmann,
I understand your concerns regarding your personal liability in the event of your company's insolvency. It is important to familiarize yourself with the legal framework and possible solutions in this situation in order to protect your personal assets to the best of your ability.
First and foremost, it should be noted that the question of personal liability in insolvency depends on various factors, such as the legal form of your company, your behavior as a director or shareholder, and whether you have violated any legal regulations.
In Germany, there are different legal forms for companies, such as GmbH, AG, or GbR. In a GmbH or AG, shareholders usually only bear liability up to their capital investment, however, in cases of insolvency delay or gross negligence, personal liability may arise. In a GbR, shareholders are liable with their personal assets as there is no limitation of liability.
To limit or avoid your personal liability, you can take various measures. One option could be to convert your company into a GmbH to limit liability to the share capital. Another option could be to apply for insolvency proceedings to avoid insolvency delay and prevent personal liability.
It is important that you seek the advice of an experienced insolvency lawyer in a timely manner to discuss your individual situation and develop possible solutions. Insolvency proceedings can be complex, and it is important to consider all legal aspects in order to protect your personal assets to the best of your ability.
I hope that this information is helpful to you and supports you in your decision-making process. I am available to answer any further questions and provide individual advice in your situation.
Sincerely,
Emma Fischer, Lawyer specializing in insolvency law
