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LAW OF THE REPUBLIC OF ARMENIA

of January 22, 2007 No. ZR-51

About bankruptcy

(The last edition from 02-07-2016)

Accepted by National Assembly of the Republic of Armenia on December 25, 2006

Chapter 1. General provisions

Article 1. Procedure for hearing of cases about bankruptcy

1. Business management about bankruptcy is performed according to the procedure, established by the Code of civil procedure of the Republic of Armenia, the Judicial code of the Republic of Armenia and this Law.

2. If this Law establishes other rules by what those which are established by the Code of civil procedure of the Republic of Armenia then consideration of the case about bankruptcy is performed by rules, the established this Law.

3. Voided according to the Law of the Republic of Armenia of 02.07.2016 No. ZR-105

Article 2. Limits of operation of the Law

1. Any legal entity or physical person, except for can be the debtor in the production established by this Law on bankruptcy:

a) Republic of Armenia;

b) municipality;

c) Central Bank of the Republic of Armenia;

d) bank;

e) credit institution;

e) investment company;

e. 1) managing director of investment fund;

g) insurance company.

The concepts used in this part "bank", "insurance company", "investment company", "managing director of investment fund"  or "credit institution" do not include bank, insurance company, investment company, the managing director of investment fund or the credit institution which got permission of the Central bank of the Republic of Armenia to self-liquidation.

2. For insurance companies, the charity, investment and pension funds, funds of securitization, investment companies, the operator of the controlled market, the Central depositary, pawnshops, subjects of natural monopoly and subjects having dominant position in the market of public organizations by the law other rules of insolvency and production on bankruptcy with their participation as the debtor can be determined, than those which are established by this Law.

3. Provisions of this Law are applied to the relations of insolvency (bankruptcy) with participation of the foreign person or the person without citizenship as the debtor if international treaties of the Republic of Armenia do not provide other.

4. Solutions (resolution) of courts of foreign states on cases on insolvency (bankruptcy) are recognized the Republic of Armenia according to international treaties of the Republic of Armenia, and in case of their absence – by the principle of reciprocity.

5. The relations in the field of insolvency (bankruptcy) of banks, credit institutions, investment companies managing investment fund and insurance companies are regulated by the Law of the Republic of Armenia "About bankruptcy of banks, credit institutions, the investment companies managing investment fund and insurance companies".

Article 3. Bases of recognition of the debtor by the bankrupt and signs of insolvency

1. The debtor can be declared bankrupt the judgment - on own initiative (the statement for voluntary bankruptcy) or upon the demand of the creditor (the statement for involuntary insolvency) if the debtor is insolvent.

2. The judgment the debtor can be declared bankrupt:

1) based on the statement for involuntary insolvency if it allowed delay of the indisputable payment obligations exceeding the thousandfold size of the minimum wage established by the law for the term of 60 days and more, and the specified delay continues at the time of decision (the actual insolvency). The payment obligation is indisputable if the debtor does not object to it or if he objects to the mentioned obligation, however:

a) the payment obligation the resolution which acknowledged took legal effect or the decision is also absent possibility of its offsetting,

b) the requirement is based on the written transaction, and the debtor does not prove that it has good causes for objection against this requirement (including offsetting of the requirement),

c) the requirement follows from the obligation of the debtor on payment of the taxes established by the law, duties or other obligatory payments and the debtor does not prove that it has good causes for objection against this requirement (including offsetting of the requirement),

d) the neocoupled part of the requirement exceeds the thousandfold size of the minimum wage established by the law;

2) on own initiative (the statement for voluntary bankruptcy) if obligations of the debtor exceed asset cost of the debtor in thousandfold and more than a size of the minimum wage established by the law: in case of the legal entity – by assessment which is carried out based on accounting rules in case of physical person – by assessment, assessment (balance sheet insolvency) which is carried out based on standards. The asset cost does not join asset cost on which according to the law collection cannot be turned;

2. 1) on own initiative (the statement for voluntary bankruptcy) if the obligations of the debtor which are subject to execution on public monetary claims exceed asset cost of the debtor - in case of the legal entity – by assessment which is carried out based on accounting rules in case of physical person or the individual entrepreneur – by assessment, assessment (balance sheet insolvency) which is carried out based on standards. The asset cost does not join asset cost on which according to the law collection cannot be turned.

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