LIQUIDATION OF COMPANIES
Compliance with the statutory procedures for the liquidation of a business entity is no less important than the procedure for its establishment.
What is the liquidation of a business entity?
The liquidation of a business entity is the final cessation of its activities without the transfer of its rights or obligations to other persons. The procedure for liquidating a business entity may take from 6 months to 1.5 years.
The liquidation procedure is quite complicated, and more so due to a possible check up by the tax authorities. Due to this, we recommend that a company with extensive experience in handling such cases is involved.
What is the liquidation procedure?
Liquidation consists of several stages:
- Adoption of the decision on liquidation
This decision is adopted at a general meeting of company participants.
- Appointment of a liquidator or liquidation commission
After the decision on liquidation is adopted, a person – the liquidator, or a group of persons – the liquidation committee must be appointed that will be responsible for the liquidation procedure. In addition, all powers to manage the business entity will be transferred to them.
- Notification of state agencies and funds
In accordance with the law, after the decision on liquidation is adopted, the registration authority in the place of the business entity must be notified within 3 days. This requires the preparation of a statement and submission of the required documents. It should be noted that the signature on the statement must be certified by a notary.
- Publication of information on liquidation
After receiving notification, the registering authority must publish a message about the liquidation in the State Registration Bulletin, in which the timeframe and procedure for creditors to initiate claims are indicated.
- Written notice is provided to creditors and employment agencies on the proposed liquidation
Legislation requires each creditor to be given written notice of the liquidation of the business entity. The notice must specify the procedure and timeframe for initiating claims. This may not be less than 2 months from the date of publication of the notice of liquidation.
- Preparation, approval and submission of the preliminary liquidation balance sheet
Two months after publication in the State Registration Bulletin, a preliminary liquidation balance sheet must be drawn up. The preliminary balance sheet is a document that indicates the value of all the property owned by the business entity, as well as any receivables and payables. Usually a list of the property of the business entity is attached to it, as well as a list of creditors and their claims. Together with the preliminary liquidation balance sheet a notice of its drafting must be submitted to the registering authority. The signature on the notification must be certified by a notary.
- Repayment of creditor claims
After drawing up the preliminary liquidation balance sheet, the business entity may proceed with the repayment of creditor claims. Settlements with creditors must be made in the order established by legislation.
- Liquidation balance sheet and distribution of company assets
After satisfying the creditor claims, a liquidation balance sheet must be drawn up that lists the remaining company property. After the founders of the business entity approve the liquidation balance sheet, the remaining assets may be distributed among the founders. When this is done, an act is drawn up which indicates the property was transferred to each founder. The act must be signed by all cooperate members.
- Registration of liquidation in the Unified State Register of Legal Entities and deregistration from the tax authorities
The final stage of the liquidation procedure is the submission of documents to register the liquidation of the business entity, and deregistration from the tax authorities. To do this the required documents must be submitted to the tax office. Within 5 days after submission of the documents entry in the Unified State Register of Legal Entities and notification of deregistration from the tax authorities can be obtained.
VALEN helps business entities undergo the liquidation procedure. Thanks to our expertise we can undertake liquidation of a business entity with maximum efficiency and minimum fuss.