To determine applicability, first establish who is legally liable for the business debts. In the case of a company with separate legal personality, the proceedings generally concern the company and its assets. An Individual Entrepreneur is not a company separate from the person carrying on the business, so personal liability and the assets attributable to that person must also be considered. The legal form, registration status, and actual business activity must also be established. Access to the relevant proceedings further requires that the statutory substantive and procedural conditions are met. Not every financial difficulty opens the door to rehabilitation or insolvency proceedings. Certain debtors may be excluded from general corporate insolvency law because of their legal status, a specially regulated activity, or a priority special procedure. Before filing an application, the debtor’s status, the extent of their assets, the creditor structure, and any special rules should therefore be assessed together. Applicability does not in itself determine whether rehabilitation or insolvency liquidation is appropriate in a particular case. That choice depends on the further statutory requirements and the debtor’s financial situation.
Applicability of insolvency law to companies and self-employed individuals in Georgia
Georgia’s Rehabilitation and Insolvency Law may apply to business debtors if their legal status and the statutory eligibility requirements allow it. Companies, Individual Entrepreneurs, and specially regulated businesses must be assessed differently.
Tip
Before choosing a procedure, first establish which legal entity is the debtor and whether general corporate insolvency law applies. Registration and financial difficulties alone are not enough. Only then can rehabilitation and insolvency liquidation be compared against their specific requirements.