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Business is impossible without competition. That is why the reputation of a company is so important. Since it can either attract new customers even in difficult times, or finally put an end to this brand. How to track reputational risks correctly? And, most importantly, how to minimize them if necessary? S&P Investment Risk Management Agency experts will tell you about it.

In an era of such a strong development of digital technologies and the enormous popularity of social networks, reputation has become more vulnerable than ever. Any information scatters instantly, it is difficult to control the content, and therefore any, even a slight impact, can affect the reputation.

If the reputation of one or another company is shaken, then this will instantly lead to a decrease in income levels, the main goals of the business will not be fulfilled, share prices will fall, and all this will make the risk of bankruptcy more than real.

What are reputational risks

Reputational risk – it is a danger that hangs over the good name or reputation of a business or organization. Reputational risk can arise in the following ways:

• Directly as a result of the actions of the company itself
• Indirectly, as a result of the actions of an employee or employees
• Regarding other peripheral parties such as joint venture partners or suppliers

Main types of reputational risks

There are two such varieties:

1. External. They are outside the company itself

Such risks include black PR from competitors, illegal actions of partners, indecent behavior may be actions on the part of partners that caused dissatisfaction with the audience, black PR from competitors, and even the behavior of influencers and more. That is, everything that the company is not able to control.

2. Internal. It is about the actions of the company’s employees

What can lead to internal risks?

1. Managers and employees

If people with a negative reputation are at the head of the company, then one way or another it will spread to the entire company. The reputation of an enterprise and its management are inseparable. The consequences of this — loss of income, customers and investors.

45% of people perceive the image of top managers and the image of the company as one

25% of the company’s value is the result of reputation alone

The problem is that even if the scandalous leader retires, it will not be so easy to fix the situation. All the same, public explanations and apologies will be needed. And even if the company begins to actively work to restore its former reputation, it may take many years in the end.

But not only the management of the company can influence the reputation of the brand, but in fact each of the employees. It is enough just to write unverified or thoughtless information on social networks. It only takes one phrase, which can be misinterpreted, to start this whole process.

2. Negative content

On the web, content may appear that will show the company in a negative light. It can be articles in the media, customer testimonials and more. If there is a lot of such material, then the level of trust in the company will noticeably decrease.

If a company is involved in some events that cast a shadow on its reputation, then this will attract maximum interest from the press. And in this situation it is necessary to act immediately. Otherwise, new facts will be constantly added to the available information, which in most cases will not even correspond to reality. That is why it is so important to start as soon as possible to apologize, refute unconfirmed data and order positive texts in special reputational agencies .

3. Social networks

Now the main struggle of the company for customers and for a positive image takes place in social networks. Any interesting brand has thousands of followers. People follow all the news related to him. Therefore, any negative moments spread in an instant.

Suffice it to recall the Nestle company, which in 2010 was simply attacked by angry Facebook users. Every day they posted a video on the wall of Nestle, which described the harm from using palm oil. All their actions had corresponding consequences for the company.

4. Loss of personal data

A good security system should be installed on the website of every self-respecting company. Moreover, it must be updated regularly. Otherwise, the simplest hacker attack will lead to the loss of trust of partners and customers.

An example of this — Accelion, a software development company. Its website was hacked, due to which some information owned by the company was made public. It was an extremely embarrassing moment.

5. Cost and quality of services

Sometimes employees, after their dismissal, in retaliation, disclose information about the company that relates to the financial aspects of its activities. Often this information can have an extremely negative impact on the company’s reputation. For example, if in recent years her business has not been very successful, then this fact is unlikely to help attract new investors.

6. External Business Change

Any changes of an external nature may adversely affect the company’s activities. For example, a change in administration has a direct impact on the success of doing business.

If the reputation of the brand has been damaged, then this is fraught with many negative consequences — income is declining, it is becoming more and more difficult to hire valuable personnel. Therefore, no matter how difficult it is to minimize reputational risks, it is even more difficult to work on restoring a damaged image.

Peculiarities of reputational risk management

• It is important to know exactly what your stakeholders expect from you

If you know exactly what your customers want, it will be much easier for you to give them what they want. But do not rush to promise them what you are not able to give.

After all, this will only bring you harm. Never underestimate a dissatisfied user.

• Brand reputation needs to be measured

To date, various reputation metrics have been created. With their help, you can determine the level of user confidence in your company, as well as how recognizable it is in the media space.

• Stay positive communication

Reputation should be carefully worked on. After all, absolutely everything that enters the information environment has a direct impact on the reputation. It doesn’t matter if it’s positive or negative. And since there is no way to completely protect yourself from the negative, you need to actively work on building up the positive.

If positive changes are taking place in your company, immediately let all your employees, partners and customers know about it. Whatever incident occurs within the company or in its close environment, be sure to show your reaction to what happened. If you’ve done something wrong, admit it. Respond readily to both positive and negative comments.

• Be aware of rehearsal risks when developing your strategy

Analyze all the weak points of your company. Determine what exactly in its activities can be considered a weak point. Come up with the most likely scenarios where the public perception of your brand could deteriorate.

Think over the main markers that would signal the need for certain measures. For example, if customers complain about the cleanliness in boiler rooms, then this means that you need to seriously improve the quality of service.

• Consider how you will respond

If things go according to a negative and undesirable scenario, you need to respond quickly, promptly and, most importantly, thoughtfully. Therefore, it is important to plan in advance how you will act in various crisis situations.

A good reputation is the key to success!

It is a fairly well-known fact that a positive image of a company leads to an improvement in the demand for its products or services. And the decline in business reputation, on the contrary, slowly but surely leads the company to collapse and bankruptcy.

Conclusions

The profit of your company directly depends on reputational risks. The reason for such risks may be dissatisfied customers, dishonest competitors and even employees. Therefore, you should always be on the alert and monitor the information field in order to identify the threat in time.

It is important to assess possible reputational risks in time. And after that, it is already possible to approach the preparation of a strategy aimed at eliminating them. This may be a rebuttal in the press, work with dissatisfied customers and much more. The strategy you have worked out should be flexible so that it can be changed and adapted to this or that situation.

Well, if you want to have a guaranteed strong reputation, you better use the services of a reputation agency. Its experts will analyze your rehearsal background and give you the necessary recommendations to strengthen your brand image.

Various conflicts often develop into litigation. The conflicting parties do not want to solve the problem through negotiations. And the reason is that each of them believes that she is right. In such cases, it is optimal to “resolve” mediation will help. What is this new phenomenon? When exactly is it applied? What are the main features of mediation? All these questions are answered in the proposed article.

Mediation – This is a way to resolve a dispute with the participation of an intermediary (mediator) through negotiations. Mediation – the best way to resolve many conflicts, especially those in which it is necessary to maintain a good reputation and previous relationships.

Plectrum – who is he?

Plectrum – an unbiased and independent specialist whose task – to help the conflicting (disputing) parties in resolving the conflict (dispute). It is he who organizes the mediation and conducts it. An important feature of mediation is that:

• decisions made by the parties mutually and independently are aimed at satisfying their own interests and needs;
• The mediator does not make decisions instead of the participants in the conflict (dispute) and does not offer options.

The tasks of the mediator

– control the negotiation algorithm;

– analyze the conflict, identify the interests and needs of its parties;

– work with the emotions of customers, establish constructive feedback;

– explore new facets of relationships and conflict resolution options;

– check the feasibility of the requirements and the ability to fulfill the agreements;

– help the parties to the conflict (dispute) take responsibility for the solution.

Plectrum function

The mediator, as mentioned above, – unbiased and independent third party. His goal – contribute to conflict resolution. In this regard, the mediator helps to analyze the situation, identify conflicting positions in the views of the parties, at the same time find common interests and understand what details are important for each of the parties. As a result of the work, identify common ground on which a mutually beneficial solution can be formed. The mediator focuses not on the legal nuances of resolving the dispute, but on the interests of the parties and ways to satisfy them.

Once again, we focus on the fact that the functions of the mediator do not include the formation or proposal to the parties of the solution itself (methods for resolving the dispute). Its function is to establish a communication process, to inspire mutual trust, that is, to create a trusting and creative atmosphere for the parties.

After the parties have worked out a preliminary solution themselves, the mediator should help them determine the criteria according to which they will evaluate different options in order to form an already optimal solution. And after the parties to the conflict settle on a mutually satisfying solution, the mediator helps them make sure that the chosen solution is realistic. That is, it conducts a so-called crash test and says what further steps the parties will take.

The mediator pays special attention to working with the emotional component of the conflict (dispute). This side is usually not taken into account by judges or arbitrators. They believe that emotions are irrelevant and cannot affect its outcome. But we are sure that broken relationships and unexpressed emotions – it is something that often results from conflict and, once started, feeds it. Lawyers are faced with the practice when the parties, under the influence of negative emotions, try to destroy each other with legal wars during the conflict. And it arose only because they misunderstood each other. This is a state called “together into the abyss”, the name of which speaks eloquently for itself. The mediator helps the parties to restore their previous relationship and establish normal communication between them. This serves as the basis on which it is possible to form realistically achievable interests and work out solutions. If there is no such soil, it will not be possible to erect a solid building of relations. The mediator is sure that if the parties have biased relations, the work with interests will be ineffective, and the – incapable of implementation.

Plectrum value

In Ukraine, the status of a mediator has not yet been clearly defined in any legal act. However, it should be noted that a similar situation exists in some other countries – for example, in the Netherlands. Despite the fact that mediation is a fairly demanded service there, it is not legally defined. However, the legislation of Ukraine contains norms that are a good basis for the use of mediation in legal proceedings practice.

One of the priorities of the Council of Europe and the European Union as a whole is to help their states in quick and fair justice, as well as in the development of alternative ways to resolve conflicts and disputes. This assistance is based primarily on the formation of standards, according to which EU members must adapt their own legislation to their legal obligations.

In the Strategy for reforming the judiciary, legal proceedings and related legal institutions for 2015 – 2020, which was approved by the Decree of the President of Ukraine No. 276/2015 dated May 20, 2015, the clause is spelled out: “… expanding the methods of alternative (out-of-court) settlement of disputes, in particular by expanding the list of categories of cases that can be resolved by arbitrators or considered by the courts in summary proceedings; the introduction of effective procedural mechanisms to prevent the consideration of cases in the absence of a dispute between the parties; study of the expediency of introducing magistrates».

The first mention of mediation in the current legislation is contained in Articles 2 and 7 of the Law of Ukraine “On Free Legal Aid”; No. 3460-VI of 06/02/2011. There she is included in the list of legal services.

The Rules of Advocate Ethics of Ukraine also mention mediation. The document states: the actions of a lawyer acting as a mediator must comply with internationally recognized ethical standards of mediation.

The conditions, volumes, content and procedure for the provision of the social service of mediation (which includes mediation) are also prescribed in the order of the Ministry of Social Policy “On approval of the State Standard for the social service of mediation (mediation)” No. 892 dated August 17, 2016.

Mediation as a new phenomenon in legal practice has contributed to the emergence of a new profession – mediator. For example, a specialist in mediation and conflict resolution in the socio-political sphere has appeared in the Classifier of Professions. We are sure that it would be more expedient at the legislative level to more clearly define the problems of the legal status of mediators. Also, prescribe the legal (professional) grounds for activity, age restrictions (the presence or absence of such). We believe that a mediator can be a person of any profession, but versed in alternative ways of resolving disputes (conflicts). By the way, the presence of professional skills of a psychologist or a lawyer, expert competence in a certain area sometimes even more harm than contribute to mediation. Such professional skills push the mediator to be too active, which makes it difficult for the parties to find a way out on their own. The mediator should work with interests, and not advise using professional experience of the past.

Responsibility of the mediator

The Draft Law “On Mediation” is under development, in this regard, the issue of legal liability remains open.

While there is uncertainty in the legislative field, it is necessary to establish what methods should be used and what should be taken into account in order to develop an effective concept.

First of all, it is necessary to distinguish between different cases of liability: 1) as a measure of influence (influence) on the violator of rules and norms; 2) as a mediation environment, for which the mediator is responsible in the process of preparing and conducting mediation.

We will focus on responsibility as a measure of impact (influence).

We are convinced that the degree of responsibility of the mediator should come from his powers and role in the mediation process. As already mentioned, one of the main factors in the generally accepted facilitative mediation model, now most practiced in Ukraine, is that the mediator does not make or offer solutions, and does not even advise the parties on solutions. However, he must contribute to its effectiveness: is the optimal structure of the process, ensuring its efficiency, maintained; whether work has been done with the emotional environment of the parties; whether progress is taking place at a pace that is comfortable for all participants in the dispute, etc. The result of mediation depends on the quality of these components. In our opinion, the issue of the responsibility of the mediator should be taken precisely in the plane of ensuring the process and observing the main principles of mediation, especially those related to confidentiality.

Conclusions

Every person (or legal entity) has the right to choose which method of protection of his own interests is most convenient for him . One of these is mediation. This is an alternative tool to other methods of conflict resolution, which is worth studying and at least once trying to apply in your life or professional activity, if it is related to conflicts and disputes between. And even if there is a conflict between enterprises, you need to know that behind the interests of any company are the interests of individuals – leaders, leaders, managers, owners. By the way, mediation is also gaining popularity in the socio-political environment. For example, in resolving misunderstandings and conflicts between authorities and communities, as well as in protecting consumer rights. Man – man, man – enterprise, enterprise – enterprise, community – power, power – power, which can be represented by some political force. And this is not a complete list of relationships in which conflicts of interest may arise and where mediation can be effectively used.

Any company sooner or later goes through a painful period – a crisis. And reputation, the most valuable asset, is the first to suffer. It cannot be quickly restored or recreated: such factors take years, if not decades, to shape.

An example would be the authority of Nike. According to Forbes, the company’s brand «fell out» from the best in the ranking only because during the basketball game, one of the players injured his leg due to a broken shoe.

And at the end of the match, Nike’s shares lost 1% and its reputation fell to 15th position.

No one is immune from the crisis, especially a sudden one. These include, for example, the COVID-19 pandemic, which has made its adjustments in all areas of life. And how an enterprise responds to such a challenge determines its credibility and relations with consumers, partners and customers in the future.

Stages of crisis.

Pre-crisis Period. Usually, a crisis is preceded by a pre-crisis period. There are suspicions that something is wrong, but it’s just not clear what it is. This time segment consists of three distinct stages.

The first stage is simple – negligence. Certain groups in the company or its individual employee did not do the job. And this happens periodically. Failure to meet sales plans, production, quality loss, failure to meet production schedules… As a result, the market is lost, and then there is an excessive loss of valuable personnel. All these are examples of negligence. Senior management did not notice appropriate threats to business at this stage.

When the problem is finally addressed, it is the second stage: during which its management denies the existence of the problem. The management hopes that it will «resolve by itself».

When problems do not disappear, but only accumulate, the company moves into the third and final stage of the pre-crisis period.

Let’s take an example. The brewery Schlitz changed its recipe and therefore began to lose part of the market (the problem was not noticed in time due to the strike at the facility of industry leader Anheuser-Busch). The whole pre-crisis period was a typical sequence of periodic failures: unsatisfactory product promotion, frequent changes of management, mutual accusations, and general dissatisfaction at all levels of the enterprise. Even before the situation stabilized, the company was absorbed by a smaller competitor.

The pre-crisis period is only the beginning of the crisis, so it is usually not visible to others. And if top managers or executives are able to acknowledge the danger, they can still prevent a crisis from occurring.

The early detection of systematic non-performance is in fact one of the main factors of senior management responsibility. But in order to do so, managers must be aware of the quality of all operations at all levels.

Crisis Period. At this time, managers cannot hide problems either from themselves or from employees of the enterprise. The next stage of the uncontrolled crisis is indeed a period of crisis.

All crises harm business, and this damage can be expressed in a ruined career or a mental breakdown of the employee, in lost means.

When a crisis begins, there is no time for blame or reproach. All leadership can do is respond adequately to the challenges and try to minimize the consequences.

Post-crisis Period. The final phase of an unmanageable crisis is characterized by uncertainty and upheaval. Hopes for the company’s past success are lost. Banks are trying to recover at least part of their investment.

The last phase of an ungovernable crisis is going to foresee dramatic changes. If the company is lucky, another investor will take it under his «wing». But most often there is a restructuring of the company under the law on bankruptcy or financial insolvency. If one of these outputs is not used, the enterprise may be liquidated or absorbed by another company.

When a crisis is managed, the sequence of its periods is predictable.

In the post-crisis phase, radical changes are taking place in business, which entails a shift of control to new people. Therefore, the primary goal of crisis management is to change the sequence of events. The ways in which the sequence of events can be changed, and the program of successful crisis management will be described below. The right preparation for management usually prevents some crises or minimizes the impact of those that cannot be avoided.

How to stimulate sales to overcome the crisis?

There are many ways to encourage sales. The choice of the most optimal one depends on the type of activity of the enterprise.

So, if the trading companies need to increase sales, then selling-off shares is quite suitable.

If you need to improve the sales efficiency of the manufacturer, the following will do: discount cards; sending commercial proposals to potential customers (one needs to have such a base); comprehensive solutions for customer service; use crm-systems to process client requests.

How to analyze company objectives during crisis?

First of all, we need to start with a diagnostic. It will create an objective picture of the company’s activities. Upon completion of the diagnosis, it is necessary to draw up a report in which to present the main facts, conditions, and trends necessary for setting goals. On the basis of this, develop a strategy for the exit of enterprise from the crisis and operational solutions for management.

The quality of the outcome will depend on the clarity, relevance, and timeliness of the objectives. It is important to remember that the goals must be realistic and achievable.

The main characteristic of anti-crisis business planning is its short-term nature. This is not to suggest that anti-crisis business planning is by no means long-term, but it will have to be revised and adjusted more frequently.

Therefore, the business plan should be drawn up for the minimum possible period, with monthly analysis of the achieved goals and adjustment of further tasks according to the results and the state of the market. It is important to note that although the implementation of the overall strategy is divided into several stages, it remains the same, and only the intermediate goals and plans are adjusted.

Business planning is often discussed in the management environment in the context of an unstable Ukrainian economy and a rapidly changing social and market environment. But it is at such times you need to be able to plan your business correctly in accordance with the economic realities.

Adjust strategy to keep the company afloat during the crisis

The fundamental advantage of crisis planning is that it is possible to regulate and adjust the actions to keep the company on a given strategic course of activity.

If we compare actual and planned indicators, we will identify the factors of deviation. They will help diagnose problems now.

Once the strategic and operational objectives have been defined and the problem points have been identified, an anti-crisis business plan can be drawn up.

Personnel management during business crises and conflicts

By «personnel management» in a company one should understand both the actions of the personnel service and the system of work with employees as a whole, that is designed to ensure their compliance to their roles (functions) in business processes. First of all, these are the actions of the line managers.

Management of an enterprise means control over all factors of production and all types of resources used. But, of course, the first priority is personnel management.

Each crisis is a unique phenomenon, so effective management requires considering the ongoing processes inside and outside the company. There are also a number of crisis management techniques: they are applicable in general but can be used in each particular case. Such methods include the following:

1. Everyone should understand that the leader really controls the situation. This is the main thing for the manager when managing staff in a situation of a crisis.
2. Select a professional team to work in a crisis situation, optimally assigning roles, tasks, and responsibilities. Each staff member must be given an assignment.
3. Do not panic and lose your cool, do not react too violently or hysterically to the situation, as subordinates will do the same.
4. Deliberately act in a slow motion so that subordinates think everything is under the control of the supervisor and goes according to the plan.

Personnel policy is also an important component of personnel management. The aim of this policy is to ensure an optimal balance between the preservation and renewal of personnel in accordance with the needs of the enterprise and the state of the labor market. In the event of a crisis, the company applies four types of personnel policies.

1. Passive personnel policy. The management of the company does not have a well-defined algorithm of actions in relation to personnel. Therefore, in a crisis in the company, human resources activities are reduced at best to eliminate negative consequences of work.
2. Reactive personnel policy. The company’s management monitors the staff for the symptoms of the crisis (lack of adequate motivation for high-productivity work, as well as a sufficiently skilled workforce to solve the problems, the emergence of conflict situations) and, by necessity, takes measures to address the crisis.
3. Preventive personnel policy. The management of the company has a reasonable vision of the development of the situation, but it does not have the means or management tools to change it.
4. Active (rational) personnel policy. The management of the company has objective data and a reasonable vision of the development of the situation, as well as the means and management tools to change it.

The investment project is the main document that determines whether investment capital is appropriate or not. In it the project is outlined consistently and step-by-step with its peculiarities, and also the financial data is presented related to its realization.

Classification of projects

According to the investment goals:

• projects with the purpose of increasing the volume of production;
• projects aimed at updating or expanding the product range;
• projects aimed at improving the quality of products produced / provided services;
• projects aimed at reducing the cost of production produced / delivered services;
• projects created to solve organizational, social, ecological and other problems.

According to the level of autonomy of implementation:

• investment projects, which depend on performance of other tasks of the enterprise (company) or projects.
• investment projects, which do not depend on performance of other tasks of the enterprise (company) or projects.

According to the terms of realization:

• short-term projects, with a period of execution being less than one year;
• medium-term projects, with a variable period of fulfillment between one and three years;
• long-term projects, with a period of implementation in more than three years.

According to investment resources:

1. small investment projects (up to 100 thousand usd.);
2. average investment projects (within the limits of 100 thousand – 1 million usd.);
3. large investment projects (more than 1 million usd.).

According to the optimal financing scheme:

• investment projects provided with the help of internal finance;
• investment projects provided by means of a shareholder (initial or additional issue of shares);
• investment facilities provided by credit finance;
• investment projects, which include all or part of the financing methods above (mixed form of financing).

Variety of investment projects

Business has to deal with a rather large number of investment projects, depending on their characteristics and peculiarities. Significant differences are caused by the sphere (branch) of realization, production and resource scale, volume of financial resources, period of execution, etc. However, regardless of this, in the investment project there must be specified and conveyed the following four obligatory points:

1. the settlement period (the term of realization of the project) – that is, the time during which the actions for fulfillment of the project are implemented;
2. amount of expenses (net investment);
3. estimated profit and benefits (net cash proceeds from the project’s execution);
4. the liquidation cost (i.e. any release of finance at the end of the economic “life” of investments).

If you correctly analyze the interdependence of these four indicators, you can determine whether it is necessary to start realization of this project at all.

The initial stage of the analysis involves calculation of the time or period of the realization of the project.

It is necessary to proceed from the fact that investing in any project should be perceived as the unity of processes of investing resources and future income. These processes usually take place in different chronological frames (sequences).

Investment into real assets is usually observed an interval of investment processes.

Consistent and parallel flow of financial investment and income-earning processes can occur mainly when investing in financial assets. Also can occur at investment in technical re-equipment, reconstruction and scaling of already working enterprises. Undoubtedly, the turnover of investment resources, the possibility of quick management of working capital, liquidity of assets and the expediency of investment activity in general depends on the time sequence of capital investments and the profit gain.

The second stage of analysis of the investment project – determination of net investments – usually has two sides:

1. the aggregate amount of the original cost based on the calculation;
2. the value of any assets that are being released.

Their release is dictated by the decision to invest. In this issue, it is necessary to make an amendment to any changes in the amount of taxes paid. They, in turn, arise from the reporting of loss or profit from the sale of existing assets.

The third stage of analysis of the investment project is determination of net cash flow from investment. The net cash flow of the project is the dependence on the time of receipt of money and payments directed to the fulfillment of the project, and it is determined for the whole settlement period.

The fourth stage of analysis of the investment project is determination of liquidation value. Large-scale projects require significant capital investments. And only then will these expenses ensure the return of at least a part of these funds.

Determining the liquidation cost of the project allows the funds to be accounted for, that can be obtained from sale of the remaining equipment, as well as from the release of working capital, which is relevant to the project.

Structure of the business plan of the investment project

The business plan provides a full feature of the possibility of realization of the project. There is no hard-established form of business plan, but the document should specify:

1. the economic essence of the project;
2. resource (e.g. optimal staff), technical (material), technological and financial support;
3. marketing activities;
4. the level of reliability of the project and the action (measures) to improve it;
5. providing financing.

The business plan thus has:

1. to orient the managers of the whole vertical in the stages and forms of realization of the project;
2. interested in participation in the project of counteragents from outside.

Methodological recommendations for the development of investment projects provided in the above-mentioned classification are distributed depending on their types.

Small investment projects, which the company can provide for financially at the expense of its own sources, can be justified by a short list of sections and indicators. For such a report (analysis) the following is enough: purpose of the project, its basic characteristics, necessary financial funds, efficiency indicators from the invested finances, as well as the algorithm (calendar plan) of performance.

If the financing of investment projects involves external sources, i.e. medium and large projects, then full analysis is carried out and full substantiation is made in accordance with national and international requirements. Such substantiation of projects is dictated by the logical structure, which has a standardized character in the countries with developed market economy. The difference from this “classic” structure depends only on the forms of real investments and branch peculiarities of the functioning of projects.

Bankruptcy is called the inability of a company to conduct business because of a lack of funds, through which there is a problem with the inability to settle the debt of the company.

A set of laws and several regulatory and legal acts of Ukraine defines and strictly controls the procedure of bankruptcy of legal entities. Refraining such an order is mandatory for all parties to the proceedings.

The bankruptcy of the enterprise is aimed not only at liquidation of the business, but also at financial rehabilitation of the enterprise. The latter implies a full financial renewal of the company and further development in the future.

Only highly qualified specialists will help you in difficult tasks, as bankruptcy for a particular type of enterprise. The bankruptcy procedure is carried out according to all legal requirements.

The bankruptcy procedure is possible for such types of enterprises:

• for businesses with high debt to partners;
• for creditors who have the objective of recovering their debt from an insolvent enterprise.

For a legal entity, bankruptcy has some pros and cons. The recognition of the insolvency of an enterprise results in a number of advantages: 

• there is a chance to preserve the property of the enterprise from alienation;
• no opportunity for the seizure of assets or funds;
• the company develops for itself a productive plan to return to solvency and fulfillment of obligations to creditors;
• business is protected from having means of withdrawal, which are not taken into account by law;
• the company/enterprise will be able to resume operations as a legal entity;
• it is possible under the law to write off the debt, including, if the enterprise has lack of money to repay it;
• if there is evidence of innocence, the owners and managers of the enterprise can avoid administrative and criminal liability.

Among the disadvantages of the bankruptcy procedure for a legal entity:

• the bankruptcy process is quite long, sometimes this process can take a couple of years;
• the bankrupt enterprise is obliged to pay all costs related to the court;
• in the bankruptcy of an individual enterprise, the disadvantages of bankruptcy can be attributed to the fact that from the moment of recognition of insolvency, the company and its management will be given increased attention;
• all licenses that the entrepreneur has previously received will be revoked, and their retrieval will be a rather difficult process;
• due to the revocation of licenses, the IP will no longer be able to carry out the activities it has previously introduced.

In which cases bankruptcy lawyer’s services are required

• the bankruptcy process is very difficult and requires specialized knowledge, as it contains legal norms;

• In more than 15 years of work in the market of Ukraine, our lawyers gained enormous experience, that allows to carry out the procedure with high-quality and speed;

• a professional team of lawyers will be able to help to mitigate all issues, minimize the risk and conduct the procedure according to the law.

Features of juridical support of the bankruptcy process of the enterprise

The collaboration starts with an interim assessment of the situation, an analysis of the volume of work and its actual achievements. Our specialists conduct an analysis on:

• Accounting department. The data is taken for the last three years of the operations of the enterprise. The obtained data forms conclusions about the causes of bankruptcy – intentional, fictitious or real;

• The prospects of the lender. The task for specialists – to find creditors who will be inclined to peaceful settlement;

• The options of legal methods to avoid liability from the customer;

• The potential informativeness of previously lost documentation;

• Disclosure of information about the debtor. Having full information will add a greater percentage of success.

At the end of the stage above, experts provide a report with the most advantageous strategy. It lists future risks and options for overcoming them, provides a preliminary cost and time frame for the procedure.

Cost of procedure through bankruptcy proceedings

The cost depends on many criteria:

• the region where the enterprise is located;
• company’s turnover;
• the number of employees in state;
• features of accounting;
• many other factors.

The price of the package of services includes:

• risk assessment for the enterprise;
• correspondent services
• complex support of business bankruptcy and a specially developed proposal: audit of interim liquidation balance, audit report.Guarantees from S&P Investment Risk Management Agency:
• Agency professionalism. We have successfully completed many bankruptcies of enterprises;
• The whole process is carried out strictly within the limits of the law;
• Confidentiality;
• Going through the bankruptcy procedure in the available short terms;
• We are reliable partners for your business. We have special permits and knowledge.

Before you start bankruptcy proceedings, you should do everything possible to pay off debts. A default declaration is permissible only if there are no other possible steps.

Legal support the S&P Investment Risk Management Agencyprovides on the bankruptcy of an enterprise is the key to success in the development of a new stage of your business.