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ration to cease commercial activities, they will continue to be at
risk of bankruptcy proceedings, as the one year period will not
have yet commenced.
• For a period of two months following its declaration of proper-
ty, a merchant may not dispose of assets that may be confiscat-
ed (Art. 44/3 of the BEC).
• A debtor who fails to make its declaration of property under
Art. 44 of the BEC, whose declaration is incomplete, who hides
assets or other values from execution of bankruptcy, and who
disposes of assets following their declaration, shall be subject to
imprisonment from between three months to one year upon
complaint of a creditor who incurs damages (Art. 337/a of the
BEC).
Hence, Art. 337/a of the BEC provides for a material sanction.
Certain conditions need to be met in order for this sanction to apply.
Firstly, a merchant must have failed to make the declaration of proper-
ty under Art. 44 of the BEC, must have provided an incomplete decla-
ration, hidden assets or other values from the execution of bankruptcy,
and/or disposed of assets following their declaration. In short, the
debtor must have violated the provisions of the BEC governing the
ceasing of commercial activities. Additionally, there must be a com-
plaint from a damaged creditor. In other words, a creditor needs to have
incurred damages and have filed a complaint. In fact, Art. 337/a/2 of
the BEC states that if the debtor proves the non-existence of damages
of the creditor, imprisonment will not be imposed.
In short, if the above conditions are met, the debtor will be impris-
oned.
Ceasing of Commercial Activities versus Liquidation
Different Mechanisms Foreseen
The TCC provides for a regulatory framework governing the ter-
mination and liquidation of commercial companies. Art. 243 et seq.,
and especially Art. 267 et seq., for collective companies; Art. 329 for
commandite companies that make a reference to the provisions related
to collective companies; Art. 529 et seq. for joint stock companies. Art.
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NEWSLETTER 2015