In the cases of the court of registration (State Registrar) ordering the winding-up, bankruptcy and liquidation of an entity, the cases are conducted in the local county courts. A final settlement is the procedure that may be voluntarily used in the company's own benefit, in which the members are not declared insolvent company and the entity is terminated without a successor.
The bankruptcy proceeding method is a debt settlement proceeding, in which the undertaking itself is initiated, the insolvency declared, and the company is still maintained. Bankruptcy protection cannot be started during final liquidation proceedings.
The liquidation of insolvent businesses by eliminating the debt settlement process ends without a legal successor, and this procedure may be initiated by the liquidator, the creditor and the debtor company as well. It is possible that if during such insolvency, the proceedings are terminated, and the company can remain as active status.
For example, if a company cannot be found despite the declared headquarters address or notice does not give an account during the company law proceedings, or for some reason the VAT number has been suspended or revoked – which means for all effective purposes the company cannot trade, it thus loses its legal capacity – and is ordered for the company's cancellation via a forced liquidation process. This differs from the "normal" winding-up, as the liquidators are appointed by the court, and then it is not possible to continue the operation of the company. A forced liquidation, winding-up can occur if the company is insolvent or no reporting accounting documents are being produced.
Lawyers work in relation to the possible initiation of proceedings and during the proceedings for either side (debtors, creditors, members, etc.). Here they work in preparing the applications for submission to the competent court, or under the procedures, for dealing with issues that require legal knowledge as may be considered. In these processes, mandatory legal representation is required at the courts.