The goal of any business is to grow and expand. However, unexpected events happen and things often go wrong. The market is becoming increasingly competitive and, in an attempt to stand out, many companies end up taking risks.
Sometimes, these risks lead to losses, and this is how a company can face judicial recovery . This term is feared by many business owners and CEOs, and every company must carry out financial management to combat this situation.
However, the best way to prevent the company from running this risk is to learn more about the subject, understanding what judicial recovery is and its business impact . Keep reading!
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What is judicial recovery?
Judicial recovery makes it possible to turkey whatsapp number data economically viable companies that are experiencing financial difficulties .
In this process, a debtor company admits financial difficulties, or an economic crisis, to settle its debts and establishes a plan to overcome this adversity.
The objective of judicial recovery is to prevent the company from going bankrupt, in addition to preserving jobs and maintaining state revenue through tax collection.
However, it is worth highlighting that judicial recovery can also help the company to continue operating its economic activities and its social function.
According to research by Serasa Experian , in 2023, there was a 70% increase in the number of requests for judicial recovery. The number is high, which shows the importance of the practice, being one of the best tools to avoid bankruptcy during a financial crisis.
What is the difference between judicial recovery and bankruptcy?
When we talk about how judicial how to put whatsapp link on instagram? works, many people already think of and associate the practice with the act of declaring bankruptcy . However, they are not the same thing.
Judicial recovery is a measure that companies adopt to avoid bankruptcy . So, despite being an indicator of an economic and financial crisis in the business, it still does not mean that the company has gone bankrupt or will go bankrupt.
Unlike judicial recovery, bankruptcy occurs when a company is unrecoverable . In other words, this requires it to.
This measure aims to preserve and optimize the productive use of the company’s goods. Assets and productive resources — liquidating each of them. So that debts with creditors, employees and suppliers.
What does the law say about Judicial Recovery?
Law 14,112/2020 , updated after the first mention in 2005, brought more procedural instruments to the judicial recovery process and betting email list some shortcomings of the old law.
The law defines and qualifies which companies can carry out the judicial recovery process, and under what circumstances. In addition, it also defines the phases of the process and what needs to if the Recovery Plan .
It is worth noting that the purpose of recovery is to prevent the company from going bankrupt. As well as to prevent its employees from. Suppliers from being of the resources they owe. Here are some points in the Law:
- New rules for financing : companies undergoing recovery can seek financing with guarantees, including the personal assets of partners.