Observatory › Business and companies › Liquidazione giudiziale (judicial liquidation): tax debts and the public prosecutor’s initiative

Liquidazione giudiziale (judicial liquidation): tax debts and the public prosecutor’s initiative

Under the Italian business crisis code, insolvency is the centre of gravity of the procedure: persistent tax debts are often the signal that sets it in motion.

Judicial liquidation may also be applied for by the Pubblico Ministero (public prosecutor) on learning of a state of insolvency.

Who may apply

Arts. 37 and 38 of D.Lgs. 14/2019 give standing to the debtor, to creditors and to the public prosecutor; a court that detects insolvency in the course of proceedings must report it to the prosecutor. Substantial tax exposures left unmanaged are among the factors that most often bring a crisis to the attention of the authorities.

Prevention is possible

For directors, prudence requires continuous monitoring of the distress indicators and prompt recourse to the available procedures, from the composizione negoziata to the mechanisms for settling tax debts. The firm supports businesses and their control bodies in assessing corporate health and in choosing the right instrument.

• Codice della crisi d’impresa e dell’insolvenza (business crisis and insolvency code) – arts. 37-38, D.Lgs. 14/2019.
• The objective condition for judicial liquidation – art. 121, D.Lgs. 14/2019.