Bankruptcy for Startups in South Florida
Do you own a startup in South Florida that is struggling financially? For entrepreneurs in South Florida, the possibility of a business bankruptcy filing can be confusing and anxiety-inducing, but it is important to know that many startups consider different types of bankruptcy. Indeed, some startups file for reorganization bankruptcies, which allow their businesses to get back on track financially and to thrive later on. Other startups file for liquidation bankruptcy and cut their losses. What do you need to know about bankruptcy for startups in South Florida? One of the experienced West Palm Beach bankruptcy lawyers at our firm can provide you with general information, and we can speak with you today about the details of your case.
What is a Startup?
For budding small business owners and entrepreneurs, the idea of a startup can be appealing. Yet it is important to be clear about what is meant by a “startup,” and whether there are any considerations in relation to bankruptcy for startups that are distinct from bankruptcies for other types of businesses.
According to Forbes, the best way to think about a startup is like this: a business that is created in order to disrupt, or make positive change, within a current industry. The Forbes article specifically defines startups as “businesses that want to disrupt industries and change the world — and do it all at scale.” Further, the article clarifies, startups tend to be “young companies founded to develop a unique product or service” that are “rooted in innovation.”
While startups generally aim to grow faster than other kinds of companies and rely more on investors for initial funding, they generally work much like other kinds of companies, especially when it comes to considering bankruptcy. Like other kinds of more traditional businesses, startups are typically structured either as limited liability companies (LLCs) or corporations, and thus they go through the same type of business bankruptcy processes as many other LLCs and corporations of similar size and debt.
How a Startup Files for Bankruptcy
Like other LLCs or corporations, a startup that is considering bankruptcy will first need to speak with a lawyer to discuss aims of the bankruptcy filing and whether the startup intends to liquidate and close, or reorganize debts. If the former, then it will file for Chapter 7 bankruptcy, which can often have a significant impact on startup investors — an important thing to be aware of, in the event this is what your business is considering. If the latter, multiple options may be available.
Depending on the nature of the business and the amount of debt, a startup could be eligible for a Subchapter V filing, Chapter 11 filing, or another type of reorganization bankruptcy. A bankruptcy attorney in West Palm Beach can discuss eligibility for different types of business reorganization bankruptcies.
Contact a West Palm Beach Bankruptcy Attorney Today
Is your startup struggling financially, and are you considering bankruptcy? It is an important time to seek advice from an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller. Contact our firm today to discuss your business’s financial circumstances and bankruptcy options that may be available.
Sources:
forbes.com/advisor/business/what-is-a-startup/
law.cornell.edu/uscode/text/11
