Business insolvency advice: define the right commission
Liquidity problems, capital loss and overindebtedness are different issues. Advice combines economic prospects, legal form and procedural stage. It clarifies options and next steps without replacing organ decisions or court approval.
Describe the trigger without prejudging it
State payment pressure, outstanding obligations or an existing proceeding. You need not classify the situation legally yourself. Advice examines suitable records to establish the position and resulting economic and legal work.
Clarify legal form and responsibilities
Legal form and involved entities affect responsibilities and duties. An external adviser does not automatically take over management or board responsibility. With multiple entities, clarify mandates, conflicts and joint versus separate analysis.
| Task | Responsibility to clarify |
|---|---|
| Economic analysis | Advisers and internal decision makers |
| Legal steps | Mandate, representation and organs |
| Court process | Court and appointed participants |
Address existing deadlines directly
A bankruptcy warning, hearing notice or procedural deadline requires immediate professional assessment. Do not wait for several quotes. An enquiry suspends no deadline and is not a court filing. First establish who takes responsibility for urgent action.
Prepare records for a sound assessment
Later work may need current accounts, payment planning, receivables, obligations and relevant contracts. Currency and completeness matter more than an unverified summary of figures. Initially only readiness is requested; confidential files are arranged securely later.
Distinguish restructuring and orderly preparation
You can seek an options assessment, restructuring concept or procedural preparation. Private agreement and court moratorium have different requirements and effects. Continuing operations is not always feasible; orderly closure may be part of the assessment.
Agree work and costs in stages
Separate initial assessment, detailed analysis, representation and implementation. Clarify output, responsible specialists and approval for additional work. Court fees and disbursements are not automatically included in advice fees. Compare the same stage and scope.
| Stage | Concrete agreement |
|---|---|
| Initial assessment | Position, urgent issues and next steps |
| Concept | Assumptions, options and decisions |
| Support | Tasks, reports and disbursements |
Coordinate communication and access
Agree communication with employees, creditors and funders. Restrict access to necessary data and record decisions clearly. Confidential advice does not guarantee that official proceedings remain unpublished. An entrepreneur’s personal debts require separate assessment.
Frequently asked questions
Does a cash shortfall automatically mean bankruptcy?
No. Position, legal form and duties require individual assessment.
Can advice guarantee rescue?
No. Viability, participants and necessary approvals affect options.
Does an enquiry extend a deadline?
No. Urgent steps need direct, clear responsibility.
Does the adviser take over organ duties?
No. Responsibilities and representation need clarification.
Is personal debt discharge included?
No. Business advice does not promise discharge of personal residual debts.
Are bank or accounting files needed immediately?
No. Stage and scope suffice. Required records are arranged securely later.
