You may be looking for a lawyer specializing in bankruptcy petitions if your company has faced circumstances that have left it unable to meet its financial obligations to creditors — a lawyer who will take every appropriate step, including liquidating its bank accounts and property and putting in place a plan to settle its obligations. So what exactly is the lawyer's role in this area, and how do we provide this service to you in the best possible way?
Bankruptcy means that a business owner is unable to pay their debts and must therefore liquidate their property and assets and distribute them among the creditors in accordance with the commercial regulations in force in the country. In this situation, the bankruptcy petition is filed through a lawyer specializing in bankruptcy cases in Saudi Arabia, with sound experience of the regulations and legislative provisions in this field, who safeguards your rights on a proper legal basis.
The Bankruptcy Law in the Kingdom applies to local companies, foreign investors, entrepreneurs, professionals and traders.
At Sahal Law Firm, we file bankruptcy petitions and register them with the commercial courts to a high standard of quality and professionalism, meeting our clients' requirements and goals, with the aim of preserving the rights of both the debtor and the creditors.
Before looking at the details of the bankruptcy petition service, it is worth clarifying some of the related terms set out in Article 1 of the General Provisions of the Law:
The Law: the Bankruptcy Law.
The Court: the Commercial Court.
Debtor: a person who has an established debt owing.
Creditor: a person to whom an established debt is owed by the debtor.
Debt: an established financial obligation owed by the debtor.
Defaulting debtor: a debtor who has stopped paying a debt claimed on its due date.
Bankrupt: a debtor whose debts exceed all of their assets.
Regulated entity: a person licensed to carry out a financial activity or to operate a public utility.
Bankruptcy trustee (or trustee): the person appointed by the court or by the bankruptcy applicant to perform the tasks and duties assigned according to the type of procedure, including the financial reorganization trustee and the liquidation trustee.
Assets: movable and immovable property, intellectual property rights, financial rights owed by others whether due now or in the future, rights attaching to any of these, and anything else that may have present or future financial value.
Bankruptcy Register: a register established, maintained and managed by the Bankruptcy Commission in accordance with the provisions of the Law.
Proposal: the offer under a protective settlement procedure, a protective settlement procedure for small debtors, a financial reorganization procedure or a financial reorganization procedure for small debtors, which is put to a vote.
Plan: the proposal accepted or approved, depending on the type of procedure.
Bankruptcy falls into three types:
This applies to a person who entered business with known and adequate capital, kept orderly commercial accounts and was not extravagant in their spending, but suffered losses beyond their control, such as their goods being lost to sinking, fire or similar.
This applies to a person who entered trade and kept orderly accounts, but was extravagant in their spending and concealed their inability to pay from their creditors until their capital ran out.
This applies to a person who engaged in trade using deception and fraud and thereby caused others to lose their rights, whether or not they were extravagant and whether or not their accounts were orderly.
Under commercial law, bankruptcy is declared only for a person who meets the following conditions: they are a trader, they have stopped paying their financial obligations, and a judgment declaring them bankrupt has been issued.
Economists point to many reasons why companies declare bankruptcy. The most important can be summarized as follows:
The main objectives of the Bankruptcy Law under commercial law in the Kingdom of Saudi Arabia are:
Filing a bankruptcy petition brings companies certain benefits, the most important of which are:
Bankruptcy should nevertheless be the company's last resort, and the specialist lawyer must consider every other possible way of rescuing the company's financial position.
One of the distinguishing features of the Bankruptcy Law under commercial law is that it includes a number of procedures, all of which aim to preserve the rights of both the debtor and their creditors. The most important of these procedures are:
There are also administrative liquidation, small debt settlement, financial reorganization for small debtors and liquidation for small debtors. Each procedure goes through the following stages: preparing the application, filing the application, opening the procedure, implementation, and closing the procedure.
Bankruptcy does not mean that you will never work again, nor that your business must close for good. There are ways and procedures that help ease the pressures of bankruptcy and protect your business and your company's assets.
You can now obtain the right legal advice and every service relating to bankruptcy petitions from Sahal Law Firm, one of the best law firms in the Kingdom of Saudi Arabia.
When a company or establishment is unable to meet its financial obligations on time, it turns to the option of declaring bankruptcy through the competent court by taking the following steps:
If you own a company or establishment that is struggling to pay its debts and you wish to file a bankruptcy petition on a sound legal basis, don't hesitate to contact Sahal Law Firm. You will receive the right legal advice on your financial position and on the legal steps that can be taken to guarantee your rights and those of your creditors, as provided for in the Bankruptcy Law under Saudi commercial law.
If you wish to file a bankruptcy petition for your company, you should appoint a specialist lawyer with a good reputation and broad experience in this field, for the following reasons:
Appointing a lawyer specializing in bankruptcy cases in Saudi Arabia is a safety valve for you: they bring experience in handling every type of case in this field, with procedures that help you overcome the obstacles you face and resolve your problems with the best legal solutions.
