That system is silly.
I can open a company, work for a year, acrue debt, acrue tax debt, close it.
Nothing will happen. Company "estate" will be sold to cover the debt, which can also be nothing.
That system is silly.
I can open a company, work for a year, acrue debt, acrue tax debt, close it.
Nothing will happen. Company "estate" will be sold to cover the debt, which can also be nothing.
No, if you don't handle this correctly you become personally liable
Probably criminally liable for bankruptcy as well. At least in Germany (where I am vaguely familiar with the law) you lose bankruptcy protection for debts you take on that are knowingly not covered by existing assets or expected future income. This is usually hard to prove, but if your assets are 0 and there was never a viable plan all along they'll likely found you guilty. This means you become personally liable to the creditors and might also face jail time.
In Germany yes, the law is pretty tough: you need to think _every_ day this "Will I be able to pay anything I have to pay with a horizon of 12 months?"
If in one day answer is NO, you have to immediatelly go and register insolvency. If you do not do it, big issue, and possible jail time.
That's what bank underwriting is for and you will quickly find that your 0 income 0 asset llc would have difficulty borrowing.
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