According to the Trade Financial Encyclopedia, bankruptcy is a situation where a person who is declared bankrupt and whose assets or inheritance is declared to pay off debt. Whereas according to the Bankruptcy Law, it can be interpreted as a general seizure of all the assets of a Bankrupt Debtor whose management and settlement is carried out by the Curator under the supervision of the Supervisory Judge as stipulated in the Law.
Bankruptcy is a threat that is very possible for anyone who manages a business or business. The threat does not only apply to newly established companies, but also for companies that have been established for decades. Every company has the potential to go bankrupt, even though the probability is only 0.01%. Bankruptcy will be a very frightening thing for the company, because the company is in a threatened position and could be destroyed. Learn more about the factors causing the bankrupt company below.
Terms of the Company Declared Bankruptcy
According to the Law, a company can be said to be bankrupt if a company has fulfilled bankruptcy juridical requirements. These conditions according to Article 2 of the Bankruptcy Law include the existence of debtors who have two or more creditors and do not pay at least one debt in full which is due and can be collected, declared bankrupt with a court decision. Creditors in this case are creditors both concurrent, separatist creditors or preferred creditors. While debt that has matured means the obligation to pay debts that have fallen due, both because they have been agreed, because of the acceleration of billing time in accordance with the agreement or because of court decisions, arbitrators or arbitral tribunals. Bankruptcy applications according to the Bankruptcy Law can be submitted by the debtor, one or more creditors, prosecutors, Bank Indonesia, Securities Companies or Insurance Companies.
Causes of Bankruptcy Companies
There are several factors causing bankrupt companies, including the following:
- Not able to capture the needs of consumers, so companies can provide services or products received by the market
- Too focused on product development, so companies can forget consumer needs.
- Companies that are too focused on product development will lose sensitivity to what is happening in the company, outside situations, and so on.
- Experiencing excessive fear, such as fear of going bankrupt, fear of loss, fear of not being able to serve consumers, fear of inability to overcome problems, and others. actually the fear is natural. However, if these fears have exceeded normal limits, then these conditions must be watched out for because it will hinder the company’s performance and bring destruction.
- Stop to innovate in business. Important innovation to be carried out by every businessman or businessman. Because without innovation, products that are sold over time will be boring for people who are the target market.
- Lack of observing the movements of competitors or competitors, so that it will cause a company to compete and lag behind. A company must always pay attention to the steps taken by competitors.
- Set prices too expensive. Indeed, there are some people who believe that high prices will make a company’s products look better and more luxurious than the original. However, what happens if there is a new company that issues a product similar to your company’s goods and sells it much cheaper. Then chances are your company will be left by consumers.
- Other causes such as debt, excessive expansion, CEO fraud, corporate management errors, uncontrolled expenditure, and much more.