News item | 15-11-2023 | 9:00 am
With turbo liquidation, entrepreneurs can quickly and easily stop their business if the company no longer contains anything of value. However, turbo liquidations also have a risk of abuse, especially if debts are left behind. Minister Franc Weerwind for Legal Protection is taking measures for more transparency, more legal protection for creditors and to prevent abuse. This makes turbo liquidation a more suitable way for entrepreneurs to stop. The measures are included in the Temporary Turbo Liquidation Transparency Act, which came into effect on November 15, 2023.
With turbo liquidation, entrepreneurs can quickly and easily stop their business if the company no longer contains anything of value. However, turbo liquidations also have a risk of abuse, especially if debts are left behind. Minister Franc Weerwind for Legal Protection is taking measures for more transparency, more legal protection for creditors and to prevent abuse. This makes turbo liquidation a more suitable way for entrepreneurs to stop. The measures are included in the Temporary Turbo Liquidation Transparency Act, which came into effect on November 15, 2023.
Turbo liquidations make it possible for entrepreneurs to stop their business in time if the company no longer contains anything of value, for example to sell the last stocks and pay as many debts as possible with these proceeds. In this way, an entrepreneur can prevent debts from increasing further if, for example, they can no longer be paid due to loss of income. The alternative is often bankruptcy in which creditors get much less of their money back. New measures should prevent possible abuse of turbo liquidations, increase transparency and offer creditors more legal protection. For example, entrepreneurs must actively inform creditors about stopping the business.
In addition, in the event of a turbo liquidation, entrepreneurs must submit financial statements to the Chamber of Commerce. This makes it clear what the last proceeds were spent on and why more debts could not be paid. More transparency also makes it possible for creditors to take action against the turbo liquidation, for example by demanding access to the administration, holding directors liable or having the turbo liquidation reversed by the court. Abusing a turbo liquidation is punishable under the Economic Offenses Act and can lead to a director ban for a maximum of five years.
In order to quickly implement the measures for more transparency and legal protection, a temporary law was chosen with which the measures will apply for two years. After this period, the measures can be extended.