An undertaking in difficulty is a company that, without state intervention, is heading towards the end of its activity with near certainty, and therefore, under the state aid rules, cannot be granted most subsidies, including contributions from EU funds. Under Article 2 of the General Block Exemption Regulation (GBER), an undertaking in difficulty is considered to be a limited liability company that has lost more than half of its registered capital as a result of losses, a company in which the partners have unlimited liability and which has lost more than half of its equity, further an undertaking that is subject to insolvency proceedings or meets the conditions for insolvency proceedings to be opened, an undertaking that has received rescue aid and has not yet repaid it, and a large undertaking with a high debt-to-equity ratio. An exception applies to micro and small enterprises within three years of their establishment, provided they are not in insolvency proceedings. Providers verify the status from financial statements; applicants in a borderline situation are advised to strengthen their equity before submitting the application.
See also: Applicant eligibility.
