Every company can unexpectedly face financial difficulties. In such a case, it is particularly the responsibility of the management to take action. Liechtenstein has clear legal provisions on how to proceed in these situations. 

In this blog post, we outline the key steps and duties of the management when financial problems arise. 

1. Loss of capital

If the latest annual balance sheet shows that half of the share capital is no longer covered, the management must act immediately:

• Informing the supreme corporate body (e.g., the general assembly in the case of a public limited company): The members of the supreme corporate body must be promptly informed about the financial situation.
• Proposing restructuring measures: Concrete restructuring measures must also be proposed to restore financial stability.

2. Justified concern of overindebtedness or insolvency

In case of signs of possible overindebtedness or insolvency, the following steps must be taken:

• Preparation of interim balance sheets: The management must immediately prepare interim balance sheets based on both going concern and liquidation values. These balance sheets provide an accurate picture of the company’s financial situation. These balance sheets provide an accurate picture of the company’s financial situation.
• Convene a general meeting of the supreme corporate body: At the same time, management must convene a meeting of the supreme corporate body and apply for restructuring measures.
• Filing for insolvency: If the interim balance sheets indicate that the company is insolvent or overindebted with a negative going concern prognosis, the management must inform the court and file for insolvency.

3. Conclusion

In financial emergencies, swift and decisive action by management is essential. The legal provisions in Liechtenstein provide a clear framework designed to protect the interests of all parties involved. 

We support you at every stage of restructuring or (impending) insolvency and help you steer your company back on the right track.

Start with us now and contact us at office@isp.law or use our fully automated booking tool to schedule a consultation at https://www.isp.law/en/book-an-appointment/ and let us lay the foundations for your business success together.