concept of insolvency with a comparative study of other legal systems

In the present era in Iran legal system, several comments have been made with respect to one of the most fundamental concepts of bankruptcy law which is the cessation of payments. Some of the law intellectuals believe that only not paying the debts at the due time will result in bankruptcy and apparently article 412 of commerce code approved in 1932 confirms this belief. On the contrary, Some of the other intellectuals believe that the merchant must be incapable of settlement of his dues considering all his assets and not being capable of paying one or more debts shall not be deemed as the insolvency in its own aspect. In countries like Iran in which merchants usually have delays in paying their debts, considering the first belief would be in contrast with the practical truth of the society. Also comparing Ifla's with bankruptcy rules in commerce code and implementing ratio of assets to the debts is not considered by the legislator. On this basis, it seems appropriate to provide a moderate view based on a legal and economic analysis of the cessation of payments. The research in this regard will be the subject of this article along with a look at other legal systems.