Bankruptcy or liquidation?
There are two ways to close a company in the Republic of Belarus:
- As a result of liquidation based on the decision of the shareholder (the general meeting) on liquidation. The representative of the company in this process is a liquidator, which is appointed by the shareholder (the general meeting).
Here you can find more information about liquidation based on the decision of the shareholder (the general meeting)
- As a result of bankruptcy of the company under the court decision, if the company cannot pay off debts. The representative of the company in this process is a crisis manager, which is appointed by the court.
Concealment of bankruptcy is a crime under Article 239 of the Criminal Code of the Republic of Belarus.
What are new criteria of bankruptcy?
On the 1st of October, 2023 the following regulations will enter into force:
- The Law of the Republic of Belarus «On settlement of insolvency» №227-Z dated December 13, 2022;
- The joint Resolution of the Ministry of Economy and the Ministry of Finance «On bankruptcy risk assessments » №16/46 dated August 7, 2023.
From the 1st of October, 2023 there will be new criteria of bankruptcy risk assessments:
| Bankruptcy risk (two ratios are considered) |
Debt coverage ratio (ratio of debt to property) |
Delinquency ratio (ratio of delinquent debt to total debt) |
| Low risk of bankruptcy | less or equal 0,50 | less or equal 0,20 |
| more than 0,50 and less or equal 0,70 | less or equal 0,10 | |
| more than 0,70 and less or equal 0,90 | less or equal 0,01 | |
| Average risk of bankruptcy | less or equal 0,50 | более 0,20 |
| more than 0,50 and less or equal 0,70 | more than 0,20 | |
| more than 0,70 and less or equal 0,90 | more than 0,10 and less or equal 0,20 | |
| more than 0,90 | more than 0,01 and less or equal 0,10 | |
| Critical risk of bankruptcy | more than 0,50 and less or equal 0,70 | less or equal 0,01 |
| more than 0,70 and less or equal 0,90 | more than 0,10 and less or equal 0,20 | |
| more than 0,90 | more than 0,01 and less or equal 0,10 | |
| Critical risk of bankruptcy | more than 0,70 and less or equal 0,90 | more than 0,20 |
| more than 0,90 | more than 0,10 |
The company is considered to be unable to pay off debts if it meets the criteria.
The Ministry of Economy did not issue the calculation instruction of these ratios. But this instruction is expected to be published on Ministry website on September.
Before the 1st of October, 2023:
- The company does not divide bankruptcy risk into four categories.
- The company use three ratios of bankruptcy risk assessments (three ratios are considered):
- Current ratio.
- Working capital ratio.
- Debt coverage ratio (ratio of debt to assets).
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