Insolvency Law at Syria
Syria's insolvency framework is primarily governed by the Syrian Commercial Code, which outlines the procedures for liquidation and bankruptcy of businesses. In addition to the Commercial Code, specific laws such as Law No. 26 of 2015 address the settlement of non-performing debts with public banks. (Machine Translation of "Law 26 Of 2015, Non-Performing Debt Settlement With The Public Banks" (Syria))
⚖️ Legal Framework
Syrian Commercial Code: The foundational legislation governing the dissolution and liquidation of companies in Syria.
Law No. 26 of 2015: A law that allows public banks to settle non-performing debts under certain conditions.
🏢 Types of Liquidation Procedures
Voluntary Liquidation: Initiated by the company's shareholders or partners when they decide to cease operations. (Understanding Liquidation and Insolvency Procedures in Syria)
Involuntary Liquidation: Triggered by a court order, often due to insolvency or failure to meet financial obligations.
💼 Key Features of the Insolvency Process
Initiation: Insolvency proceedings can be initiated by the debtor, creditors, or through a court order.
Appointment of Liquidator: A court-appointed liquidator manages the liquidation process, including asset distribution. (Understanding Liquidation and Insolvency Procedures in Syria)
Asset Liquidation: The liquidator sells the company's assets to repay creditors.
Distribution of Proceeds: Funds are distributed to creditors based on a legally established priority hierarchy. (Understanding Liquidation and Insolvency Procedures in Syria)
📌 Creditor Rights and Priority
Secured Creditors: Generally have the highest priority, with claims satisfied before unsecured creditors.
Unsecured Creditors: Include suppliers and employees, who are paid after secured creditors. (Syria: Laws Allow the Ministry of Finance to Seize Syrians’ Property - Syrians for Truth and Justice)
Shareholders: Typically receive any remaining assets after all creditor claims are settled. (Understanding Liquidation and Insolvency Procedures in Syria)
⚠️ Challenges in the Insolvency Process
Legal Delays: The judicial system may experience delays, affecting the timely resolution of insolvency cases. (Understanding Liquidation and Insolvency Procedures in Syria)
Administrative Inefficiencies: Bureaucratic processes can hinder the efficiency of liquidation procedures.
Economic Conditions: Ongoing economic challenges may complicate asset valuation and sale.
🔄 Alternatives to Bankruptcy
Debt Restructuring: Negotiating new terms with creditors to manage debt repayment.
Debt Settlement: Agreeing to pay a reduced amount to settle debts.
Negotiation with Creditors: Direct discussions to reach mutually agreeable solutions.
🏛️ Role of the Court
Oversight: Ensures that liquidation proceedings comply with legal requirements.
Dispute Resolution: Addresses conflicts between debtors and creditors.
Appointment of Liquidator: Designates an individual or entity to manage the liquidation process.
📌 Conclusion
Syria's insolvency laws provide a structured framework for the liquidation of insolvent businesses. While the legal and administrative processes are in place, challenges such as legal delays and economic conditions can impact the efficiency of these proceedings. Creditors and debtors alike should be aware of their rights and obligations under Syrian law to navigate the insolvency process effectively.
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