What is a Composition and Its Forms of Realization?
In this article about what a composition is, we aim to answer all the questions that come to your mind. This concept holds great significance for businesses on the verge of bankruptcy. This is because the concept of bankruptcy postponement has been abolished in our country.
What is a Composition?
It would be correct to start our topic by answering the question. Let's assume you own a company that has generated significant profits for years. However, due to inflation or an increase in debts, your business has reached a point that endangers it and may even lead to bankruptcy. In such situations, there is a way out. The process of making an agreement with your creditors to cover your debts and make payments under certain conditions is referred to as a composition. This solution is both lawful and will allow your business to breathe a little easier. For this process, companies must apply to enforcement law courts. For this reason, this process represents a very difficult period for businesses. Enforcement law courts grant companies a three-month period. During this time, an official appointed by the court attempts to reach an agreement with the creditors of the company. Primarily, creditors are asked to waive a portion of the debt. If this request is met positively and accepted, the court issues a composition decision on your behalf. After the decision is made, the commercial courts approve the decision. Following the approval, your debts are paid within the agreed-upon period. However, if the commercial court does not approve, it declares your company bankrupt. Composition is regulated in the articles of the Enforcement and Bankruptcy Law and can be carried out in four different ways. These include ordinary composition, post-bankruptcy composition, composition by abandonment of assets, and restructuring of capital companies and cooperatives through an agreement. It is possible to access the list of businesses that have had to declare bankruptcy from past to present on their websites. Although this situation is very painful and risky for a business, it is sometimes considered the most appropriate method to resort to when there is no other option left.
