(1) The purpose of a preventive settlement shall be to avoid the insolvency or the cessation of
activity of a company and to enable the debtor company clear its debts through a preventive
composition agreement.
Preventive settlement shall apply to any natural or corporate person doing business and
to any non-trading private corporate person, to any public corporation having the form of a
private corporate person, facing a difficult but not irremediable economic and financial situation
no matter the nature of the debts.
(2) Receivership is a procedure aimed at safeguarding a company and clearing its debts through
a composition agreement.
(3) Liquidation proceedings are aimed at disposing of the assets of the debtor company in order
to clear its debts.
(4) Receivership and liquidation proceedings shall apply to any person who stops payment. Such
person may be a natural or corporate person doing trading, a non-trading private corporate
person and any public corporation having the form of a private corporate person.
Official translation
Spot-checked
In force from 10 April 1998
Source page 7