Prospera MundiGuides · Transitions and closure
Insolvency or orderly closure: the 21-day deadline and personal exposure
Once an insolvency reason exists, filing is no longer an optional business preference. The management question becomes whether the legal trigger has already occurred and when the 21-day clock began.
The two insolvency reasons
The Insolvency Act distinguishes inability to pay from over-indebtedness. Inability to pay concerns a lasting inability to meet due monetary obligations; statutory presumptions include payment bases remaining unexecuted in the FINA register for more than 60 days or three consecutive unpaid salaries. Over-indebtedness compares the legal person’s assets with existing liabilities, subject to the statutory exceptions.
Threatened inability to pay is different: it may support pre-insolvency while the business can still be restructured. It is not the same as an already-existing insolvency reason.
The 21-day duty
A person authorised to represent the debtor must file without delay and no later than 21 days after the insolvency reason arises. Failure can create personal liability for damage. Waiting for the annual accounts or hoping that one customer pays does not suspend the statutory clock.
Closure is available only while the company can pay
Regular liquidation is for a solvent company that can satisfy creditors. If assets are insufficient, insolvency is the route for collective creditor settlement. Pre-insolvency is the restructuring route before the situation passes that boundary. FINA and the court also have statutory roles when blockages and employee claims reveal an inactive debtor.
A temporary cash gap
A company is late because one customer pays a week late, but it can meet all due obligations from available facilities. A short delay is not automatically a lasting inability to pay; the full facts must be examined.
Long-standing blocked payments
Unexecuted payment bases remain in the register for more than 60 days and salaries are unpaid. Statutory presumptions are engaged, so management must treat the filing duty as urgent rather than continue ordinary closure planning.
A viable business in approaching distress
Forecasts show that upcoming obligations cannot be met, although an insolvency reason has not yet crystallised. This is the window in which pre-insolvency and restructuring options may still preserve operations.
Frequently asked questions
We are one month late with salaries. Is that already insolvency?
A delay is a serious warning sign, but the statutory insolvency tests examine inability to meet due obligations and the applicable legal presumptions.
When must the filing be made?
The responsible person must file within the statutory period after an insolvency reason arises. The clock is tied to the facts, not to a later management decision.
What if I miss that deadline?
Late filing can create personal, procedural and other statutory consequences. Continuing to incur obligations may worsen the exposure.
What happens if I do nothing?
Other creditors or institutions may trigger proceedings, while management duties and potential responsibility continue.
How much does opening insolvency cost?
The required advance and total cost depend on the statutory route, available assets and the work needed in the proceeding.
May I open a new company after insolvency?
Insolvency does not create one universal lifetime ban, but court measures, director duties, debts and the facts of the former company may affect the answer.
What happens to employees and unpaid salaries?
Employment claims enter the prescribed insolvency and employee-claims protection framework, with specific categories, deadlines and limits.
Verified primary legal sources
Open verified primary sources (5)
The links open the primary legal texts used in the mechanical verification of this guide.
- Croatian Insolvency Act5.
- Croatian Companies Act62.a; 239. para. 2.; 423.
- Croatian Employee Claims Insurance Act3.
- Croatian Criminal Code249.
- Croatian Public Procurement Act254.
Status date: 30 July 2026. This guide is general information, not tax or legal advice for a specific case. Croatian rules and annual amounts can change; the date above is part of the information.
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