Restructuring of a sole proprietorship – what is it and what can it bring?

Restructuring itself means a process in which changes are introduced in the functioning of a company run by an individual entrepreneur in order to improve its financial condition. These changes are also intended to help increase the efficiency of the entrepreneur’s activities and support the adjustment of activities to market conditions. Certainly, increasing the company’s profitability may have a positive impact on acquiring additional orders or customers, which translates into the company’s financial liquidity, thus allowing it to repay other liabilities.

What are the types of restructuring?

Restructuring law currently distinguishes four types of restructuring proceedings:

  • proceedings for approval of the arrangement
  • accelerated arrangement proceedings
  • Composition proceedings
  • restructuring proceedings

When selecting restructuring proceedings, the most important issue is entrusting the analysis of the legal and actual situation to a professional entity. In particular, he will pay attention to the amount of current debt and the company’s earning capacity, which have the greatest impact on the selection of the type of procedure. It is worth noting that from the moment the restructuring proceedings are opened, the entrepreneur does not have to repay the liabilities covered by the proceedings, i.e. those existing on the day of opening the proceedings. This will certainly allow you to obtain additional financial resources to settle some of your liabilities. Importantly, in the case of running a sole proprietorship, restructuring proceedings cover not only business-related liabilities, but also the entrepreneur’s private liabilities.

What conditions must be met to carry out restructuring proceedings and are they profitable?

First of all, an entrepreneur running a sole proprietorship must have problems with debt repayment, which means insolvency or may lead to his insolvency. It is worth noting that such proceedings can only be carried out once every 10 years, otherwise they are ineffective.

The procedure itself should be considered beneficial to the entrepreneur. It allows you to adjust the repayment terms to the entrepreneur’s capabilities and possibly reduce the amount of the receivable. Creditors often decide to recover at least part of the receivables, considering the possible bankruptcy of the entrepreneur. Therefore, carrying out restructuring proceedings is often the best option for an entrepreneur who has lost financial liquidity.


Grzegorz Streckbein


Advocate. He completed his legal studies at the Faculty of Law and Administration of the University of Silesia in Katowice. In his daily practice, he deals primarily with issues related to the day-to-day service of business entities, with particular emphasis on corporate service. His interests also include reorganization and mergers and acquisitions (M&A) matters. He advises management boards and supervisory boards of capital companies.

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