of October 13, 1994 No. 761
About approval of the Regulations on sanitation, reorganization and liquidation of insolvent enterprises
The government of the Republic of Moldova DECIDES:
1. Approve Regulations on sanitation, reorganization and liquidations of insolvent enterprises it (is applied).
2. To the industry ministries and departments, other state bodies to carry out the analysis of economical and financial condition of the companies for the spheres of management in a month, to constitute and since November 15, 1994 to keep the list of insolvent enterprises.
To the ministry of privatization and management of state-owned property till December 1, 1994 to constitute and begin to keep the Summary list of insolvent enterprises on the republic.
3. The industry ministries and departments, other state bodies, and in necessary cases together with the Ministry of privatization and management of state-owned property and in coordination with the Ministry of Economics and the Ministry of Finance, after inclusion of the company in the List of insolvent enterprises:
a) in two weeks resolve issue of dissolution of administrative board and of release of the head of insolvent enterprise as inappropriate to post and appoint:
at the company which is subject to sanitation - the manager-head on the agreement (contract) on competitive basis, and also, if necessary, administrative board,
at the company which is subject to reorganization or liquidation and sale, the authorized representative under the contract for management;
b) in a month develop and claim:
on the companies which are subject to sanitation - programs of sanitation (business plans),
on the companies which are subject to reorganization without change of type of property - plans of reorganization;
c) in two weeks provide filing of applications in Arbitration about initiation of proceedings about bankruptcy - on the insolvent enterprises which are subject to liquidation and sale for money.
5. To the Ministry of Education together with business centers since this academic year to organize preparation and retraining of managers-heads of the companies in educational institutions.
6. To the ministry of privatization and management of state-owned property to the industry ministries and departments to create in struktuktura of central offices specialized divisions on work with insolvent enterprises in a month.
7. Recommend to Arbitration of the Republic of Moldova to consider promptly applications entrusted persons of insolvent enterprises about initiation of proceedings about bankruptcy.
9. Determine that the salary is paid to the authorized representative and members of liquidation commission of insolvent enterprise, and and also, in case of need, traveling expenses in the place of the main (former) work are covered. Besides, the monthly monetary reward is guaranteed to the authorized representative and members of the liquidating commission: to the authorized representative - in the amount of 50 percent of the average monthly salary (for the last three months) the head (director) of the relevant company paid from fixed assets of compensation of the reorganized insolvent enterprise, or their means obtained in case of liquidation (sale of property) of insolvent enterprise, and to members of liquidation commission - in the amount of 50 percent of their average monthly salary (for the last three months) from the means obtained from sale of property of the liquidated company.
Prime Minister of the Republic of Moldova
to the order of the Government of the Republic of Moldova of October 13, 1994 No. 761
1. This Regulations on sanitation, reorganization and liquidation of insolvent enterprises (further - the Provision) are developed according to the Laws "About Entrepreneurship and the Companies", "About Bankruptcy", "About Privatization" and establish procedure for determination of insolvent enterprises and the procedure of their sanitation, reorganization and liquidation.
2. This Provision extends to the state companies, and also to the companies of other forms of business from shares of state-owned property over 50 percent.
3. In this Provision the following basic concepts are applied:
insolvent enterprise - the company which owing to imperfect (inefficient) managing and management is not able to fulfill debt obligations;
sanitation of the company - system of actions for improvement of financial position of the company for the purpose of prevention of its bankruptcy;
reorganization of the company - merge, accession, separation, allocation, transformation to other form of business;
liquidation of the company - closing of the company and sale of its property;
the bankrupt company - insolvent enterprise which the award of arbitration is announced by the bankrupt.
4. Financial analysis of the company, assessment of its balance with use of the following main indicators is made for determination of insolvent enterprises:
the coefficient of current liquidity characterizing security of the company with current assets for conducting economic activity and timely repayment of urgent obligations of the company;
coefficient of security with own means which characterizes availability at the company of own current assets necessary for its financial stability;
the coefficient of recovery (loss) of solvency determining availability of real opportunity at the company to recover or lose the solvency during the certain period.
5. The coefficient of current liquidity is determined as the relation of actual cost of the current assets which are available at the company in the form of production supplies, finished goods, money, receivables and other current assets to the most urgent obligations of the company in the form of short-term loans of banks, short-term loans and various accounts payable. Formula of calculation of coefficient of current liquidity (Lt)
Note. In brackets codes of lines of balance of the company are given.
When calculating liquidity rate of its values it can be determined by the end of the reporting period or as average for the accounting period. In this case when calculating each of sizes entering formula the average size determined by half-sum of values of balance sheet items for the beginning and the end of the accounting period undertakes.
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