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Enterprise bankruptcy
Definition
A business is in a situation of failure or filing for bankruptcy from the moment when a judicial settlement procedure is opened against it. This procedure occurs when a business has suspended payments, that is, when it is no longer capable of covering its current liabilities with its available assets.
Note
The notion of failure must not be confused with the notion of death of the enterprise. A judgement opening failure proceedings (filing for bankruptcy of a company as part of judicial proceedings) does not necessarily culminate in liquidation. The notion of death corresponds to the total stoppage of the company's economic activity. Not all deaths are linked with a failure.
The liquidations that follow a failure represent only a part, around 20% but variable with time and the business sector, of all deaths of enterprises.
